Two Thai Billionaires Eye Insurance Investments

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BILLIONAIRES' MOVES

Dhanin, Charoen 'eyeing insurance investments'

Achara Pongvuthitham,

Chamnan Noisamran

The Nation

Two Thai billionaires are apparently seeking to build up interests in the insurance business.

BANGKOK: -- Dhanin Chearavanont looks to be interested in taking a stake in Ping An Insurance Group, China's second-largest insurer, while Charoen Sirivadhanabhaki is showing an interest in taking over ING Group's life-insurance business in Thailand.

Shanghai Securities News reported that HSBC might sell its 15.57-per-cent stake in Ping An to CP Group for 74 billion Hong Kong dollars (Bt293 billion).

A source at CP Group, which was quoted by the newspaper as the potential bidder, said the bid could have been a personal attempt by Dhanin, if it is not from one of the group's more than 100 associated companies in China. Dhanin is chairman and chief executive officer of CP Group.

The group, known in China as the Chia Tai Group, was the first multinational enterprise to invest in that country's agribusiness, back in 1979. Its business there involves mainly animal feed, retail (Lotus Supercentres), automotive- and motorcycle-parts manufacturing, plastics, and media and entertainment.

The conglomerate briefly stepped into life-insurance business in Thailand, through a stake in what was then Ayudhya Allianz CP Life (now Allianz Ayudhya). The holding was divested last May.

Despite the group's opting out of the insurance business in Thailand, "Khun Dhanin may have a different view towards the insurance-industry outlook in China", the source said.

HSBC on Monday informed the Stock Exchange of Hong Kong that it "has from time to time received approaches regarding its shareholding and confirms that it is in discussions which may or may not lead to the sale of the shares. A further announcement will be made if or when appropriate."

According to Bloomberg, a deal would be the largest transaction globally for insurance assets in two years. HSBC CEO Stuart Gulliver, under pressure to revive profitability, has already sold assets, including some insurance operations in Asia.

"HSBC group will be more devoted to the commercial banking business, rather than insurance," after a sale, Wilson Li, a Shenzhen-based analyst at Guotai Junan Securities, wrote yesterday in a note to clients.

The bank may use the proceeds to "invest more heavily in HSBC China to secure its position as the leading foreign bank in China", he said.

Ping An Insurance Group was ranked 100th in Forbes' "Global 2000" league table this year, 242nd in Fortune magazine's "Global 500 Leading Companies" and No 1 among China's non-state-owned enterprises.

The group was ranked 78th in WPP Millward Brown's "BrandZ Top 100 Most Valuable Global Brands".

Ping An has about 490,000 life-insurance sales agents and 175,136 full-time employees. It provides comprehensive products and services in insurance, banking and investment under a unified brand through multiple channels and networks to more than 74 million individual and corporate customers.

Ping An posted 22.58 billion yuan (Bt111 billion) in net profit on top of income of 272.2 billion yuan last year.

CHAROEN'S EXPANSION GOAL

In Thailand, liquor tycoon Charoen is expanding his life-insurance business.

According to his son-in-law, Chotiphat Bijananda, who is the executive chairman of Southeast Insurance, the group has approached Hong Kong-based Pacific Century Group (PCG) for either a takeover of ING Life Assurance or equity participation.

PCG recently bought the life-insurance company from ING, which is divesting Asian business in a bid to return bail-out money to the Dutch government.

ING Life Assurance would open ways for Southeast Insurance's sales of policies through TMB Bank's network, Chotiphat said.

Charoen's group failed in its bid for Thanachart Life Assurance, which was recently sold to Prudential Life Assurance for Bt17.5 billion.

Thailand's life-insurance penetration rate is low, providing opportunity for growth, Chotiphat said.

"We haven't yet appointed a financial adviser. We proposed three options to PCG just a few weeks ago. There has been no response yet. When we have a response, we will know where the deal will lead to and then we will appoint a financial adviser," he said.

Southeast Insurance proposed three alternatives: acquisition of all shares in ING Life Assurance, partial acquisition, and a joint venture. Chotiphat said pricing should be the key to encourage PCG to sell all the shares. However, Southeast Insurance is also ready to embrace the options of a partial sale or joint venture.

All life-insurance companies in Thailand have foreign partners, except for Southeast Insurance. Partnering with Southeast Insurance would mean a bigger market share for a foreign player, he added.

Asked how much a deal would cost, he merely said: "It should not pose much trouble to Khun Charoen."

-- The Nation 2012-11- 21