HSBC Insurance (Asia-Pacific), an indirect wholly-owned subsidiary of HSBC, has entered into an agreement to acquire 100% of the issued share capital of AXA Insurance (Singapore) for US$575 million.

The proposed acquisition, which is subject to regulatory approval, is a key step in achieving HSBC’s stated ambition of becoming a leading wealth manager in Asia by expanding its insurance and wealth franchise in Singapore, a strategically important scale market for HSBC, and a major hub for its ASEAN wealth business.

AXA Singapore is currently the eighth-largest life insurer in Singapore by annualized new premiums, fifth-largest property and casualty insurer and a leading group health player. AXA Singapore had net assets of US$474 million, annualized new premiums of US$85 million, gross written premiums of US$739 million, and profit before tax of US$23 million for the year ended December 31 2020.

AXA Singapore is a good fit with HSBC’s existing HSBC Life Singapore business. Both businesses have complementary products across the spectrum of insurance solutions and distribution channels, while AXA Singapore provides access to a sizeable tied-agency sales force, several leading independent financial advisory firms, and a large pool of insurance policyholders and corporate relationships.

This combined business will not only materially scale up HSBC’s presence in the regional insurance market, it will also provide an excellent platform for future growth. The combined business would be the seventh-largest life insurer (based on annualized new premiums) and fourth-largest retail health insurer (based on gross premiums) with over 600,000 policies in-force covering life, health, and property and casualty.

“This strategic investment is a key milestone for HSBC Life to materially scale up, grow and diversify our insurance and wealth business in Singapore,” Nuno Matos, HSBC’s chief executive, wealth and personal banking, says. “The proposed acquisition will immediately put us in a leading position in health and employee benefits, and accelerate our build out of a distinctive and holistic wealth and health planning business, operating beyond our branch network. Burgeoning affluent and high-net-worth populations in Singapore and across Southeast Asia will drive strong demand for an array of wealth, health and insurance solutions for individuals, their families and SMEs [small and medium-sized enterprises].”

Following the completion of the deal, the intention is to merge the operations of HSBC Life Singapore and AXA Singapore.