Generali Spends Big on China Insurance Expansion

In this iPMI Global Country Guides Insights article, iPMI report author Ian Youngman, takes a look at the news that Generali has become a 100% shareholder in a Chinese insurer. It has bought a 51% stake in Generali China Insurance from China National Petroleum.

Ian Youngman is a writer and researcher specialising in insurance. He writes regularly for a variety of magazines, newsletters, and on-line services. He publishes a range of market reports, and undertakes research for companies. To read his latest report, International Health Insurance 2023, please click here, or visit the REPORTS section of iPMI Global.

• Generali China Insurance offers a range of products.
• Italy’s biggest insurer has acquired full control of a non-life insurance joint venture in China by buying out local partner CNPC Capital for 99 million euros ($108 million).
• Back in November CNPC Capita sought to launch a public tender for its stake in its partnership with the Italian insurer.
• This is the first instance in which a foreign insurer has acquired a controlling stake in a property/casualty insurer in China from a single state-owned entity through a public auction.
• Generali will continue to partner with CNPC Capital through their Generali China Life Insurance and Generali China Asset Management joint ventures,
• Generali China Life, created in 2002, has GWP of 3 billion Euros.
• Generali China Life offers individual and group PMI.
• China National Petroleum Corporation (CNPC) is one of the major energy groups in the world and one of the world’s largest state-owned companies.

Analysis

• China has massive potential on insurance and particularly on health insurance.
• China is the world’s second largest general insurance market by premiums, with an attractive growth profile.
• There is a lot of scaremongering in the West about the threat from China but with the country developing fast, such as becoming the biggest electric car maker, businesses need to look at the commercial opportunities rather than panicking due to the political paranoia of politicians and media,
• The transaction is fully aligned with the Group’s ‘Lifetime Partner 24: Driving Growth’ strategy in strengthening Generali’s position in its key Asian markets.
• The group is one of the key European insurers in the Asian market.

What Next?

• Moving from minority shareholder with a state-owned partner allows Generali to develop the company how it wants to.
• Generali plans to expand its distribution network in China.
• The acquisition represents a long-term strategic investment to develop a fully owned and controlled general insurance business in China, positioning Generali well to capture an increasing share of the growing Chinese market.