Allianz is set to expand its Singapore insurance operations through a S$2.7 billion deal for HSBC Life Singapore, according to Reuters.
The German insurer will acquire the entire company, while HSBC will continue offering insurance through its Singapore banking network.
The companies have also agreed to a distribution partnership lasting at least 15 years.
The agreement includes an upfront S$200 million payment from Allianz for HSBC to distribute its insurance products in Singapore, taking the total value of the arrangements to S$2.9 billion.
The partnership will move HSBC to a capital-light bancassurance model, allowing it to earn distribution fees without retaining the underwriting business.
The transaction is expected to close in the first half of 2027, subject to regulatory approval.
The disposal is expected to add up to 15 basis points to HSBC’s common equity tier 1 capital ratio and generate a pre-tax gain of about US$1.8 billion.
The deal comes as CEO Georges Elhedery continues to streamline HSBC’s operations. The bank is also reviewing its retail businesses in Turkey, Australia and Egypt.
HSBC will retain its focus on wealth and wholesale banking in Singapore.
The bank began reviewing its Singapore insurance business in May after expanding the unit through its US$529 million acquisition of AXA Singapore in 2022.
For Allianz, the acquisition provides another route to grow in Singapore after it withdrew its proposed majority investment in Income Insurance in 2024 following government opposition.
Featured image: Edited by Fintech News Singapore, based on image by Frolopiaton Palm via Magnific