German insurance group ERGO Group has increased its stake in its ERGO China Life joint venture (JV) in China to 65% from 50%, reported Asia Insurance Review.
The latest development comes after the company obtained approval from the Shandong regulatory agencies for an application to acquire additional stake.
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The parties did not disclose the financial details of the stake acquisition.
A joint venture between ERGO Group and Assets Investment owned by Shandong state in China, ERGO China Life was founded in July 2013 and began operations in September 2013.
As per the agreement, Assets Investment slashed its stake in ERGO China Life to 35% from 50%.
Parallelly, ERGO China Life shareholders intend to inject CNY400m ($54.8m) into the JV to support the company’s long-term growth.
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By GlobalDataThe JV secured several capital investments from its shareholders with the first capital increase occurring in 2016, doubling opening registered capital to CNY1.2bn from CNY600m.
ERGO China CEO Jurgen Schmitz was quoted by Yicai Global as saying that the Chinese insurance market is filled with development opportunities and this is also the strategic focus of ERGO’s global businesses.
The purchase is another significant milestone for ERGO in building its insurance value chain in China, he noted.
ERGO Life Insurance’s compound annual growth rate of premium income was 30.8% in the five years ended 2022 but posted a total loss of CNY2.2bn as of 31 December 2022.
