HSBC Insurance Holdings will acquire Axa Singapore for $575 million, the London-headquartered bank announced in a statement on Monday (Aug 16).

The deal's completion is subject to regulatory approval, and will result in the merger of HSBC Life Singapore and Axa Singapore operations. A spokesperson declined to provide the expected completion date and said it would be announced accordingly after regulatory approval. 

The combined business will form the seventh-largest life insurer in Singapore based on annualised new premiums and the fourth largest retail health insurer based on gross premiums, the statement stated.

Axa Singapore is currently the eight- largest life insurer in the city-state with annualised new premiums of $85 million. The insurer has net assets of $474 million, gross written premiums of $739 million and profit before tax for the year ended December 31 of $23 million.

The announcement comes a year after Bloomberg revealed that the French insurer was looking to sell its Singapore business to raise funds. Axa had also reportedly been considering the sale of its life and general insurance venture in Malaysia.

In January, HSBC and Maybank’s insurance venture Etiqa were reportedly among shortlisted bidders for Axa Singapore for a sale worth $700 million.

HSBC said in the statement that the acquisition is “a key step” in its wealth management ambitions by helping the bank expand its insurance and wealth business in Singapore.

“Wealth is one of our highest growth and highest return opportunities, and plays to our strengths as an Asia-centred bank with global reach. We are acquiring a good business that fits well with our existing operations,” Noel Quinn, group chief executive at HSBC said.

In a 2019 interview, Pierre-Emmanuel Brard, chief investment officer of Axa Singapore, told AsianInvestor that it has been increasing allocation to private assets in its $3 billion portfolio.