New York Life Withdraws From China Life Venture as Japan’s Meiji Yasuda Steps In

Japanese mutual life insurer Meiji Yasuda Life Insurance Co. has entered the China market with the acquisition of a 25% stake in Haier New York Life Insurance Co. Ltd. from New York Life Insurance Co.

New York Life will withdraw from the life joint venture by selling another 25% stake to Haier Group, the Chinese partner of Shanghai-based Haier New York Life. After the transaction, the life venture will be renamed Haier Meiji Yasuda Life Insurance Co. Ltd.

"This transaction will also allow New York Life to devote our financial and management resources to our other operations, which serve millions of our policyholders," said Dick Mucci , chairman and chief executive of New York Life International, in a statement.

Elsewhere in Asia, New York Life agreed to sell its life insurance operations in Hong Kong and South Korea to Ace Ltd. for about US$425 million in cash as it focuses its operations in the United States (BestWire, Oct. 27, 2010).

Under agreements among the three entities, Haier Group and Meiji Yasuda Life will purchase New York Life's entire stake in Haier New York Life. The life unit is a 50-50 joint venture formed between New York Life and electric appliance manufacturer Haier Group in 2002. Its current registered capital stands at 835 million yuan (US$126 million).

The equity transaction is subject to regulatory approvals, said Meiji Yasuda Life.

After the transaction, the new life venture will immediately issue new shares of 345 million yuan to Haier Group and Meiji Yasuda Life. The new share issue will increase Meiji Yasuda Life's stake to 29.24% and that of Haier Group to 70.76%. The registered share capital of the life venture will then be increased to 1.18 billion yuan.

Meiji Yasuda Life "will seek opportunities to increase our stake in the future based on the momentum and predictions of the life insurance market in China and business development of Haier Meiji Yasuda Life," said the Japanese insurer.

The life insurance market in China "has realized continued growth in recent years and this growth is also expected to undergo significant development in the future," said Kenji Matsuo , president of Meiji Yasuda Life, in a statement. The mutual life insurer is looking to strengthen its overseas business to enhance growth and diversification.

Matsuo said Haier Group "enjoys a good reputation through its wide distribution network and millions of customers throughout China."

"Meiji Yasuda Life's business alliance with Haier Group is certain to complement our sustained growth in the increasingly globalizing insurance market," said Matsuo.

Haier New York Life offers life, accident and medical insurance for individuals and groups through a multidistribution network of agents, bancassurance, telemarketing and online channels. The life insurer will look to develop "a differentiated, sustainable life insurance business suitable for the China market," together with Meiji Yasuda Life's experiences in life business, said Shaohua Cui , chairman of Haier New York Life, in a statement.

Meiji Yasuda Life has made several overseas expansion moves in the past year. In November 2010, the Japanese insurer invested 100 billion rupiah (US$10.9 million) to acquire a 5% stake in Indonesia's PT Avrist Assurance, formerly known as PT Asuransi AIA Indonesia, a life subsidiary of AIA Group (BestWire, Nov. 9, 2010).

Also, Meiji Yasuda Life formed a capital and business alliance with Germany'sTalanx AG to seek expansion in Central and Eastern Europe (BestWire, Nov. 8, 2010).

Meiji Yasuda Life Insurance Co. currently has a Best's Financial Strength Rating of A (Excellent).

(By Iris Lai , Hong Kong bureau manager: [email protected])