(Agencies/China Daily)
Updated: 2007-11-30 16:28

People visit the Ping An booth at the 5th Money Fair in Shanghai on Nov.21. The insurer Thursday purchased 4.18% of Belgium-based Fortis, becoming the latter's biggest shareholer.[newsphoto]

Ping An Insurance (Group) Co has paid 1.81 billion euros for a stake in Fortis, Belgium's biggest financial-services company, in the largest overseas acquisition by a Chinese insurer.

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Ping An, the nation's second-biggest insurance company, purchased 4.18 percent of Fortis, based in Brussels and the Dutch city of Utrecht, the Chinese firm said in a statement to Hong Kong's stock exchange yesterday. Fortis said it invited Ping An President Louis Cheung to join its board.

Fortis, in a statement to Hugin wire, said Ping An's investment "allows it to gain access to high-growth markets, in particular China".

Ping An bought 95.01 million Fortis shares on the Euronext Brussels and Euronext Amsterdam on November 27.

Insurance premiums in China increased 24 percent in the first nine months from a year earlier, driven by an economy that expanded 11.5 percent, according to data from the industry regulator.

China's insurance regulator has urged firms to spread risk on their more than US$300 billion of assets. In July, China allowed them to invest 15 percent of assets in overseas stocks and bonds, up from five percent. Ping An said its acquisition was part of its strategy of "applying its insurance funds and matching its assets to its liabilities".

Ping An, based in the southern Chinese city of Shenzhen, quadrupled third-quarter profit to 3.6 billion yuan, powered by gains on investments in Chinese stocks, the world's best performers this year. The company oversaw US$45 billion of investments as of June 30.

Ping An's bigger rival, China Life Insurance Co, is also on the prowl for possible acquisitions. The world's largest insurer by market value is "very interested" in buying foreign banks, board secretary Liu Ting said yesterday.

The MSCI World Finance Index has fallen 7.9 percent this year, the worst performance among 10 industry groups on the MSCI World Index.