Tuesday, September 26, 2017

Insurance firms stocking up on capital

Asian insurers have raised more than twice as much capital so far this year compared to 2014, according to Dealogic data.

Insurance companies based in the region raised US$5.4 billion in debt and equity capital during the first five months of the year, while at this time in 2014 they had raised just US$2.7 billion.

Capital-raising increased significantly during the second half of 2014 to end the year at US$12 billion, though this was largely due to the US$4.75 billion equity offering by Ping An in December.

This year’s fund-raising activity is mostly focused on equity, as insurers take advantage of high valuations to raise regulatory capital and also to build war chests for potential mergers and acquisitions.

On that front, M&A activity is running at a slightly higher pace than in 2014, with US$6.75 billion of deals announced so far this year, compared to US$4.8 billion at this time last year. Fosun’s US$1.84 billion acquisition of an 80% stake in Ironshore is already bigger than last year’s largest deal — and market participants say there are more big deals in the pipeline for the second half of the year.

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