Chinatrust Financial buys MetLife Taiwan for $180mn

The move will expand Chinatrust’s capability to offer insurance and diversify its revenue sources.

Chinatrust Financial Co. Ltd, Taiwan’s third-largest financial services provider by assets, has agreed to purchase US-based MetLife Inc’s Taiwanese life insurance unit for US$180 million. With the acquisition of MetLife Taiwan, Chinatrust will finally be able to enter the life insurance market it has long coveted.

The ownership transfer deal, which is pending approval of the Insurance Bureau under Taiwan’s Financial Supervisory Commission, will be wholly financed by Chinatrust Financial. The company has been attempting to both internationalize, and diversify its financial products, and build a strong platform in the insurance sector. Chinatrust Financial had competed for every foreign life insurance unit put up for sale in recent years, pursuing every opportunity to enter the local market. The company’s most recent bid attempt resulted in a failure to buy Nan Shan Life Insurance, the Taiwanese branch of AIG, in January.

Chinatrust Financial has already experienced success in the bank insurance sector in Taiwan, becoming a domestic industry leader through its subsidiary Chinatrust Commercial Bank. The bank generated premium revenue of over NT$100 billion (US$3.4 billion) for two consecutive years through its bancassurance business platform; with profits exceeding NT$16 billion (US$ 542 million) for 2010. The addition of MetLife will expand Chinatrust’s capacity to sell insurance, and diversify their revenue sources.

Speaking at an evening press conference, Chinatrust Financial company president ,Daniel Wu, said of the upcoming purchase of MetLife Taiwan: “This will not just be a simple financial investment, but a strategic investment,” he added “the group wanted to purchase a life insurance unit so it could tap into the local market and use it as springboard into the Chinese market.”

Chinatrust Financial has promised to retain MetLife Taiwan’s 624 domestic employees, and fully guarantee the rights of the company’s 307,000 preexisting policy holders. Chinatrust are prepared to pool resources from the company’s other financial services subsidiaries to help make inroads into the lucrative mainland China insurance market. President Wu said he planned to increase Metlife Taiwan’s assets up to NT$500 billion (US$ 16.7 billion) from less than the NT$100 billion (US$3.4 billion) at present.

View the full story in Globalsurance.