Chinese insurance firms continue overseas acquisitions

Chinese insurance firms are increasingly participating in overseas acquisitions at a time when the global insurance market is experiencing consolidation, says James Peagam, global head of insurance advisory at JP Morgan Asset Management.

This action allows Chinese insurers to expand their business overseas and diversify their portfolios, at the same time gaining access to expertise and good returns, Peagam says.

Some notable acquisitions in recent times include Anbang Insurance's 2014 acquisition of the Belgian insurance company Fidea, and its acquisition of the Dutch insurance company Vivat earlier this year.

Fosun, a Chinese conglomerate, is also diversifying its businesses, expanding into the global insurance market through its acquisition of the Portuguese insurer Fidelidade in 2014.

"We've seen a lot of acquisitions not just by Chinese firms but everybody. It is a review of what is capital efficient, as some companies may not have enough capital to survive on their own, so they join with other companies in the process," Peagam says.

Peagam was speaking at an insurance investment event hosted by JP Morgan Asset Management in London on Tuesday.

The event explored the trend of insurers considering investing into alternative asset classes as declining bond yields globally has meant that investing in fixed income assets is increasingly hard for insurers to pay claims or meet policyholder guarantees.