Anbang adds to overseas investments

Anbang adds to overseas investments

Anbang Insurance Group has once again looked beyond China’s border as it seeks new investment opportunities after the business agreed a deal to acquire Delta Lloyd Bank Belgium for €219m.

The deal is expected to be completed at some point next year, and Anbang’s acquisition does not include Delta Lloyd’s banking activities in the Netherlands.

Delta Lloyd said the deal will allow it to focus on its plan to grow its life insurance and pensions operations in Belgium.

“The proposed sale of the banking activities in Belgium will strengthen the group’s focus on insurance and unlock capital for investment in our strategic activities,” said Delta Lloyd’s executive board chairman, Niek Hoek.

For Anbang, the acquisition is another example of the company investing in assets outside of China, a strategy that fits in with suggestions made by the China Insurance Regulatory Commission.

Back in October, CIRC’s vice-chairman, Chen Wenhui, said insurers should diversify their investment portfolios outside of the company to protect against a slowing domestic economy ( Oct 24, 2014).

As Wenhui explained, Chinese insurers currently invest just 1% of their assets overseas, even though the CIRC has increased the ceiling allowed under its regulations to 15%.

This gives China’s insurers considerable room to maneuver when it comes to investing overseas, although Chen warned against a rush to do so, noting that only well-capitalised and competent companies should look to invest more abroad.

But, as Chen also explained, over the next seven years the Chinese insurance sector, which included the life market, would accumulate around CNY20trn ($3.23trn) worth of premiums that would need investing “safely”.

Anbang’s proposed acquisition of the Belgian banking operations of Delta Lloyd is not the first time the Chinese company has sought to invest outside of its home country. At the beginning of October, it agreed to acquire the world famous Hilton Worldwide Holdings-owned Waldorf Astoria New York in a deal valued at $1.95bn.

While Anbang has bought the hotel, Hilton will continue to manage the property for the next century. The hotel will now undergo a major restoration and renovation project while its former owner intends to use the monies gained from the sale to fund further hotel acquisitions in the US.

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