Ping An Buy 4.2% of Fortis

by Stewart Douglas

Story link: Ping An Buy 4.2% of Fortis

Chinese assurance giant Ping An has today announced it has acquired a stake in insurance group Fortis in a move that proves to be the latest in a long line of investment from Asia into European based financial services companies off the back of strong economic growth in the region.

Ping An is thought to have paid $2.7 billion for a stake equal to 4.2% of Fortis, below the landmark 5% to avoid the regulatory burdens that brings. Likewise the investment of 4.2% is sufficient enough to give Ping An a foothold in the European insurance industry, without allowing them substantial say in the management of the company.

The move comes amidst several other notable investments from Chinese based institutions in recent weeks, funded by rampant economic growth over the last decade and driven by a desire amongst Chinese businesses to gain entry into more established markets in order to secure investments for the future.

Ping An is China’s second largest life assurance firm behind giant China Life, which is currently anticipating a move into the European and North American insurance markets over the coming months.

Speaking today on the deal, Ping An were thought to have said they were satisfied with the terms of the deal, and would look to continue their input and investment in the European insurance industry through Fortis and other insurance groups.

Specialising in life insurance products, Ping An, owned 17% by HSBC, has enjoyed strong domestic growth in recent years as a result of the growth of commerce in China which has created a strong middle class, growing the demand for life insurance products.

It remains to be seen whether Ping An will look to up its investment, and indeed whether rival China Life will launch into the more established insurance markets as intended.