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© Reuters. File photo: The AIA logo was displayed at its office in Hong Kong, China on February 24, 2017. REUTERS/Bobby Yip
HONG KONG (Reuters)-AIA said on Tuesday that it has agreed to acquire a 24.99% stake in China Post Life Insurance Co., Ltd. for 12 billion yuan (US$1.86 billion), increasing the insurance company’s business in China and providing its One third of new business in 2020.
AIA stated in a stock exchange document that its wholly-owned China Life Insurance business will remain independent of this investment.
China Post Life is a subsidiary of China Post Group Co., Ltd., a Chinese postal service operator, targeting the Chinese mass market and emerging mass consumers who sell its products through China Post’s subsidiary China Postal Savings Bank.
Its new business value (VONB) measures the expected profit of new premiums and is an important indicator of future growth. It will be RMB 1.866 billion (US$289.1 million) in 2020.
AIA’s China business, which targets middle-class and wealthy customers, will have a VNOB of US$968 million in 2020, accounting for 32% of the total revenue of AIA Group (OTC:).
Li Yuanxiang, CEO and President of AIA Group, said in a statement: “The Chinese insurance market is already the world’s second largest and has huge long-term growth opportunities,” adding that this investment will allow AIA to benefit from additional Distribution channels and customer segmentation.
The transaction is still subject to the approval of the China Banking and Insurance Regulatory Commission.
($1 = 6.4544 renminbi)
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