Insurance Australia Group (IAG), the country’s largest automobile and home insurer, is reportedly planning to buy a 25 stake in China Pacific Insurance Co.’s property unit. A report from Bloomberg.com said that according to sources close to the deal it could close as early as next month.
China Pacific’s property unit, the second largest in China, currently has around a 12 percent share of China’s $13.2 billion home and auto insurance market. By those figures the 25 percent stake would be worth around $485 million.
The Australian insurance firm is looking to expand overseas as domestic law prevents it from expanding past its current position. It controls around half of the Australian market.
The article noted that following the general opening up of the Chinese economy and the subsequent significant increase in car and home ownership, the Chinese property insurance market grew 25 percent in 2004 to $13.17 billion.
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