Hiscox, the specialist insurance group, announced it has reached an agreement to sell the Hong Kong division of its DirectAsia business to Well Link Group Holdings Ltd., a member of a Hong Kong-based financial conglomerate.
The transaction, which will allow Hiscox to focus the future growth of DirectAsia on its operations in Singapore and Thailand, is subject to regulatory approval from the Office of the Commissioner of Insurance in Hong Kong, Hiscox said in a statement.
The Hong Kong division of DirectAsia was established in 2012. It generated $8 million of GWP in 2015, serves 29,000 customers and employs 40 people. Its primary business is motor, with ancillary lines in travel.
As a direct-to-consumer insurance provider supported by call centers, it provides a different business model in a market where agent-based channels predominate, the Bermuda-based Hiscox said in a statement.
Prospective buyer Well Link is backed by an investor group with interests in insurance broking, corporate and customer finance, securities and futures brokerage, and asset management. Its acquisition of the Hong Kong division of DirectAsia will complement its existing businesses and provide it with broader product opportunities, the statement added.
“The Hong Kong division of DirectAsia is a business with a great team and a distinctive business model, which has grown its premium income strongly since launch,” commented Bob Thaker, managing director, DirectAsia Group.
“However the focus for DirectAsia is on our core Singapore and Thailand markets where we see significant growth opportunities, and this transaction allows us to focus our energy and investment on those markets,” he added. “Well Link is a great fit in terms of values and culture for the people and customers of the Hong Kong business unit, and this transaction gives them an attractive platform for growth in the region.”
A representative from Well Link added: “We welcomed the opportunity working with the current DirectAsia team to make it another successful business of our group. It is an important step towards our group’s long-term ambition to build a successful finance business in this region.”
Customers in Hong Kong will continue to be served as normal by the business, and need take no action as a result of this announcement. Following completion of the transaction, Well Link will have the right to use the DirectAsia brand in Hong Kong for a maximum period of 12 months.