Anbang subsidiary wins property insurer crown
Updated: 2015-03-18 06:27
By An Baijie(HK Edition)
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A subsidiary of Anbang Insurance Group Co Ltd has become the mainland's largest property insurer after securing a capital injection of 18 billion yuan ($2.88 billion), which analysts say will fuel the company's ambitious overseas expansion program.
According to the China Insurance Regulatory Commission, the injection has pushed the registered capital of Anbang Property Insurance Inc (API) to 37 billion yuan. But, the report did not identify the stakeholders or their shareholding.
API has now overtaken Ping'an Property Insurance Inc, which has a registered capital of 21 billion yuan, as the country's largest property insurer.
API was established in Sept last year as a unit of Anbang Insurance Group, which had kept a low profile until last year following a string of global acquisitions, including the purchase of the famed Waldorf Astoria Hotel in New York.
Apart from API, many other Anbang subsidiaries and the group itself have secured capital injections many times since last year. The group raised its total registered capital twice last year - reaching 61.9 billion yuan in November.
Xu Xian, director of the China Insurance and Social Security Center at Shanghai's Fudan University, said the latest funding will boost the Anbang group's overseas expansion, given that the sustainable operation of its overseas assets will cost a lot of money.
The group's overseas acquisitions have focused mainly on real estate and fixed assets, which will reduce risks and create more stable returns in the long run, Xu told China Daily on Tuesday.
Following its global buying spree, the Beijing-based insurer is facing multiple challenges, including the thirst for capital and the management of international human resources, he added.
Ted Li, executive director of capital markets for Cushman & Wakefield Inc, told China Daily that Anbang's series of international acquisitions are lifting its position as a global giant with multiple investments in insurance and real estate.
Many mainland enterprises have encountered problems in seeking globalization, including cultural conflicts and lawsuits, which Anbang might also face, Li said.
The Anbang group has made several high-profile purchases in the past few months, including a $1.95-billion deal with Hilton Worldwide Holdings Inc for the Waldorf Astoria. The price is the largest ever paid for a US hotel, according to research group Lodging Econometrics. In February, Anbang invested $1 billion to acquire a 63-percent stake in South Korea's Tongyang Life Insurance Co.
The privately-held insurer is considering an initial public offering, which could garner up to $2 billion, according to Bloomberg News.
Through the international acquisitions, Anbang has set an example for mainland firms to invest overseas, and its experience would be a great reference for other mainland companies, said Xu.
Many mainland insurance companies have invested in overseas real estate in recent years to diversify and seek higher returns.
Last year, China Life bought 70 percent of an office building along London's Canary Wharf in a $1.35-billion deal and, in 2013, Ping An Insurance Group acquired the Lloyd's of London building for 260 million pounds ($388 million).
anbaijie@chinadaily.com.cn
(HK Edition 03/18/2015 page9)