August 20, 2004
Millea Asia of Japan has announced its decision to purchase for an undisclosed price a nearly 100% stake in the fire insurer Allianz President General Insurance Co. (AZPG), a 50/50 joint venture between Europe's largest insurer Allianz and Taiwanese foods and chain store leader Uni-president Group which has already succeeded in turning profits in the five years since it was established, building a 3.3% market share in Taiwan's property insurance market. In the first half of this year, AZPG ranked 14th for revenues from premiums on new insurance policies.
This transaction marks the convenient intersection of the respective business development strategies of each company, leaving all parties smiling. The general theme appears to be: Allianz and Uni-president build AZPG into a viable, growing player in Taiwan's insurance market, making it an attractive buyout target for the expanding Millea.
For its part, Millea, Japan's top property insurer and the seventh largest insurance group in the world by market capitalization, says this purchase is part of its efforts to expand its presence in the greater Asia Pacific region. Adding AZPG's 3.2% market share to the current 4.5% market share of Newa Insurance Co., a joint venture with Taiwan auto giant Yulon Group in which Millea holds a 30% share, gives a Millea a very respectable 7.7% of Taiwan's overall insurance market. Newa is Taiwan's tenth largest provider of non-life insurance and, due to its being run by Yulon, 86% of its business comes from auto insurance. In addition to boosting market share, this purchase also allows Millea to diversify within Taiwan's property insurance market by combining auto and fire insurance operations.
Posting profits at AZPG within just five years, Allianz, remaining committed to Taiwan, initiated this sale in order to focus on its other operations here. Allianz President Life Insurance is one of the top-five life insurers in Taiwan, while Allianz Dresdner Asset Management provides asset management services to companies in Taiwan.
Uni-President says it is concentrating on its core food and chain-store businesses and has begun to sell off its non-core investments, including those in the financial industry. Taiwan's massive foods giant owns Taiwan's 7-Eleven franchise (the outright leader among convenience stores in Taiwan) and, in a reflection of its own expansion strategy, is also the second largest producer of instant noodles in China.
(United Daily News, Taipei Times)
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