Insto roundup: Aviva mulls sale of Asia biz; FWD seeks China licence
AUSTRALIA
Brisbane-based insurer Suncorp will cease to invest in, finance or insure new thermal coal mines and power plants, and has pledged not to underwrite any existing thermal coal projects after 2025.
The move is the latest in a series of initiatives backed by banks and financial services companies to cut ties with projects that mine or burn coal for electricity generation. It shows Suncorp's aim to align with the broader goals of the Paris climate agreement struck in 2015.
Source: The Guardian
Sydney-based superannuation fund Christian Super has become the first international investor to acquired a stake in ResponsAbility Investments, a Swiss impact investing company.
ResponsAbility's has $3 billion under management through private debt and private equity funds aimed at promoting responsible investing in over 90 emerging economies.
Source: Money Management
Australia's PSC Insurance has agreed to buy 100% of the share capital of Lloyd’s and London market broker Paragon International holdings for an initial estimate of £42 million ($51.07 million).
The acquisition – expected to generate an incremental annual Ebitda of £4.2 million for the insurer – is subject to approval from the UK Financial Conduct Authority.
Source: Insurance Business
HONG KONG
FWD has applied for a licence to operate a majority-owned joint venture in China as it seeks to venture into the mainland ahead of a public offering in a bid to expand its presence in Asia.
The Hong Kong-based insurer's plan to penetrate the world's second largest insurance market came after a buying spree in which the firm has spent more than $6 billion on half a dozen deals in the region in past six years.
Source: Reuters
JAPAN
The Government Pension Investment Fund (GPIF) posted its second straight quarterly gain as overseas stocks and bonds generated returns even as most major currencies depreciated against the yen.
The world’s largest pension fund returned 0.16%, or ¥257 billion ($2.4 billion), in the three months to June 30, boosting its assets to ¥159.2 trillion, it said August 2. Overseas stocks were GPIF's best performing investment, returning 1.3%, followed by overseas debt and domestic bonds. Its Japanese stocks lost 2.3%.
The allocation to foreign debt and equities reached record highs in percentage terms, GPIF said.
Source: GPIF
GPIF is adding currency hedges just as the country’s most well-known exponents of the strategy, its domestic insurers, cut back on FX hedging.
GPIF revealed in its annual report last month (on July 5) that it was buying overseas bonds with hedges against possible yen fluctuations for the first time.
Meanwhile, earnings reports from Japanese life insurers show they cut the proportion of the portfolio they hedge to 55% in March, from as high as 63% in September 2016.
Source: Bloomberg
KOREA
Korea Investment Corporation (KIC) has appointed David Park Dae-yang as chief investment officer, the sovereign wealth fund said on August 5.
As reported by AsianInvestor in June, Park was chosen for the three-year position from among a dozen applicants in June. He became KIC’s first CIO with experience as a pension fund CIO, having previously worked as CIO of Korea's Teachers’ Pension since January 2017.
Source: KIC (in Korean)
MALAYSIA
RHB Bank, Malaysia's fourth-biggest lender, said on Wednesday (July 31) it had received permission from the country's central bank to start talks to sell up to 94.7% of its shares in its general insurance arm to Tokio Marine Asia. RHB said a deal was subject to Ministry of Finance and central bank approval.
Tokio Marine Holdings, one of Japan’s largest property-and-casualty insurers by market value, had said in January that it would actively pursue deals overseas to further diversify its geographic footprint.
Source: Reuters
MYANMAR
Three foreign insurance companies have cancelled plans to launch operations in Myanmar after the government tweaked the requirements at the last minute.
Thailand's Muang Thai Insurance and Muang Thai Life Assurance, and South Korea's DB Insurance could not finalise agreements with local partners, an industry insider said.
The Myanmar government recently announced approval for six new foreign insurers to set up joint ventures in the country. Nine had originally applied to the government, including the three that have just cancelled their launch plans.
Source: Nikkei Asian Review
PHILIPPINES
Philippines’ Metro Pacific Investments Corp has received interest from a variety of potential buyers for a minority stake in its hospital unit, which could be valued at up to $2.5 billion, company executives said on Thursday.
The investment and infrastructure holding company plans to sell a 40% stake in Metro Pacific Hospital Holdings at a valuation of $2 billion to $2.5 billion, company chairman Manuel Pangilinan told Reuters.
Metro Pacific owns 85.6% of the healthcare unit, which operates 14 hospitals. Singapore sovereign wealth fund GIC owns the remaining stake.
Source: Reuters
SINGAPORE
Sovereign wealth fund GIC has agreed to invest in a pipeline infrastructure entity that Abu Dhabi’s national oil company is setting up with asset managers BlackRock and KKR.
GIC will invest $600 million and will acquire a 6% stake in the newly formed entity, Adnoc Oil Pipelines, which is worth nearly $5 billion.
BlackRock and KKR own 40% while Adnoc owns 51%, Adnoc said on Tuesday. The Abu Dhabi Retirement Pensions and Benefits Fund said earlier this year it would acquire a 3% stake.
Source: Financial Times
TAIWAN
Taiwan's Bureau of Labor Funds (BLF) delivered an overall investment yield of 7.57% in the first six months of the year, amid progress to settle the US-China trade war and quantitative easing measures signalled by major central banks globally.
Source: BLF
GLOBAL
Aviva is considering options for its Asian business, including a possible sale of the unit as its new chief executive seeks to overhaul the British insurer, people familiar with the matter said.
The Asian assets could be valued at about $3 billion to $4 billion, and a formal process could kick off later this year, the sources said, asking not to be identified. Aviva is exploring options with potential advisers, but discussions are at an early stage and no final decisions have been made, the people added.
Several rival insurers have signalled interest in the business, though some potential bidders would only want to acquire parts of the division. A representative for Aviva declined to comment.
Source: Bloomberg
The Canada Pension Plan Investment Board plans to start a credit arm in India with a view to providing capital to the country’s troubled financial system.
The C$392 billion ($297 billion) retirement fund is putting together a credit strategy for the country, which could see the fund partner non-bank providers to offer debt or enter the market directly, international investment head Alain Carrier told the Financial Times.
The fund has invested roughly 2% of its overall portfolio in India and intends to increase that share, Carrier said. A net return of more than 13% on its Indian assets in the year to March 31 beat its overall return of 9%.
Source: Financial Times
A new report found that the level of global insurance industry mergers and acquisitions has increased considerably in recent times.
According to Clyde & Co’s Insurance Growth Report, there were 222 completed M&A deals worldwide in the first half of 2019 up from 196 in the second half of 2018. This represents a 13% increase in M&A deals – the biggest rise in the volume of transactions since the first half of 2015. The figure also represents the fourth consecutive six-month period of M&A growth.
The Asia Pacific region saw an uptick with 38 insurance M&A deals recorded for the first half of 2019, marking the fourth straight period of rising deal volume to the highest level since 2015, Clyde & Co noted. Japan led the region in terms of deals made, followed by Australia then India.
Source: Insurance Business
The Washington State Investment Board (WSIB) said it had committed up to $300 million to Warburg Pincus’s second China Southeast Asia private equity fund, which aims to raise $3.5 billion.
WSIB has had a 24‐year partnership with PE firm Warburg Pincus, investing in 12 of its previous funds since 1994, pension plan officials said. The latest commitment was recommended by WSIB private equity consultant Hamilton Lane.
Source: Chief Investment Officer