Standard Life Expands into Hong Kong Life and Pensions Market through Joint Venture

Strategic Insights -

Standard Life, the Edinburgh-based mutual life insurer, has announced its plans to enter the Hong Kong life and pensions market through a joint venture with China Everbright, one of China's leading companies. This move reflects the group's aggressive strategy to expand overseas, following its earlier rejection of a takeover approach from Lloyds TSB. Standard Life will be the majority shareholder in the new Hong Kong operation, called Standard Life (Asia), with 51% stake. HIH, Australia's biggest general insurer, will hold a 29% stake, while the remainder will be held by Everbright.

Key Takeaways:

  • Standard Life will partner with China Everbright to launch a joint venture in Hong Kong, taking a 51% stake in the new operation called Standard Life (Asia).
  • HIH, Australia's largest general insurer, will hold a 29% stake in the new operation, with the remaining 20% to be held by Everbright.
  • The joint venture will start with HK$150m (approximately £12m) of capital and plans to add to it in due course.
  • Standard Life has a small operation in Spain and is also looking to expand in Germany, adding to its international expansion efforts.
  • The group has received legislative approval for a joint venture in India, further demonstrating its commitment to international growth.
  • Standard Life's new business exceeded £4bn in the year ending November 15, a significant increase from four years ago.
  • Scott Bell, Standard Life's group managing director, emphasized the group's commitment to international development, citing Hong Kong as a "very attractive opportunity for profitable growth".
  • Robin Knight, the chief executive of the new operation, aims to make Standard Life (Asia) one of Hong Kong's premier life insurance companies.

Statistics:

  • £6.7bn: The agreed takeover stake of Lloyds TSB in Scottish Widows, a rival insurance company.
  • £4bn: The new business milestone achieved by Standard Life in the year to November 15.
  • £12m (HK$150m): The initial capital investment for the joint venture operation.
  • 51%: Standard Life's stake in the new Hong Kong operation, Standard Life (Asia).
  • 29%: HIH's stake in the new Hong Kong operation.
  • 20%: Everbright's stake in the new Hong Kong operation.

Sources:

  • "Standard Life strikes $8.5bn Asian deal"
  • "Scottish Widows sold to Lloyds for £6.7bn"
  • Standard Life Group Annual Report 1999-2000.