CGNU, the U.K.’s largest insurance company, continued its planned exit from the European p/c market and its expansion in Asia with the announcement that it would sell its Portuguese property insurance business to Victoria Seguros SA, a subsidiary of Munich Re’s Ergo Group, and that it had concluded a 10-year agreement with Singapore’s DBS Group to distribute its insurance products through the company’s Hong Kong operations.
Munich Re owns over 90 percent of Ergo, and is dedicated to its development as a leading primary insurer. The company now derives more than half its income from non-reinsurance related activities. CGNU’s Portuguese property activities generated €21 million ($18.3 million) in premium in 2000.
The deal with DBS, one of Southeast Asia’s largest banks, will give CGNU increased access to Hong Kong’s $1.4 billion long-term savings market, which is growing rapidly. CGNU will also pay £31 million ($44 million) to acquire two life and general insurance subsidiaries, Dao Heng Assurance and DBS Kwong ON Insurance.
The transaction increases CGNU’s presence in Hong Kong’s bancassurance sector, which accounts for around 30 percent of the total insurance market.
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