The ERGO Insurance Group is entering the Singapore insurance market by acquiring 100 percent of the property-casualty insurance company SHC Insurance.
This acquisition will be another important milestone for the strategy of ERGO to expand its presence in South East Asia.
SHC Insurance offers a wide range of property-casualty insurance products. The company recorded a premium income equiv-alent to 45 million euros last year, with a profit amounting to an equivalent of five million euros in 2013. SHC Insurance ranks on the 14th position on the Singapore property-casualty market.
Until now, SHC Insurance is owned by SHC Capital Asia Limited which is part of the Malaysian See Hoy Chan Sdn. Berhad Group. Founder of this group is the late Dato’ Teo Hang Sam whose family still remains the group’s main shareholder.
The purchase price is the equivalent to about 66 million euros, subject to net asset value adjustments. Approval for this transac-tion has already been granted by Singapore’s financial supervisory authority. The completion of the transaction is subject to approval by the shareholders of SHC Capital Asia Limited.
The property-casualty market in Singapore has grown at a rate of around ten percent annually over the last years and showed strong profitability with Combined Ratios just above 90 percent. "Growth prospects for the upcoming years are also positive, sup-ported by the local supervisory authority’s initiatives to develop Singapore into a global insurance hub by 2020 comparable to the London market. SHC Insurance is well positioned for future growth", stated Jochen Messemer, member of the ERGO Board of Management. "We want to further expand the business of SHC Insurance. ERGO can leverage its strong expertise in risk management as well as its broad experience in further developing innovative products and sales channels."
Entering the Singapore insurance market fits into ERGO’s interna-tional growth strategy, which focuses also on the highly attractive property-casualty markets in South East Asia. In this region, ER-GO is already present in Vietnam where it holds 35 percent of shares in Global Insurance Company (GIC).
Other South East Asian target markets next to Singapore and Vietnam include Indonesia, Malaysia, Thailand and the Philip-pines. "Most property-casualty insurance markets in the region are relatively small, with premium volumes ranging between 800 million and three billion euros in the individual markets. In many of these markets, only few qualified experts are available. We aim to steer the individual companies through a regional management team in Singapore. The acquisition of SHC Insurance is another important milestone for this purpose", said Jochen Messemer.