BRUSSELS: Belgian insurer Ageas will have 2.5 billion euros ($2.7 billion) in cash from next year to spend on acquisitions or give back to shareholders, its chief executive Bart De Smet said on Friday.
Ageas, the former insurance unit of bailed out Belgian-Dutch group Fortis, has seen its cash pile boosted by the sale of the group’s Hong Kong business for HK$10.7 billion ($1.4 billion), which will complete next year.
Acquisitions were likely to focus on life and non-life businesses in Asia, for instance in Indonesia, or “add-on” businesses in European non-life markets such as Belgium, Portugal and Italy, where the medium-sized insurer already has a strong presence, De Smet told Reuters.
“We continue to look to opportunities to expand the group. If we don’t find sufficient possibilities, part of the cash can be used to give back to shareholders,” he said, noting investors in the insurance sector were generally “more reluctant with respect to acquisitions”.
De Smet did not say if Ageas was currently bidding for any companies.
Ageas on Wednesday reported a weaker than expected result from its insurance activities, as a drop in stock markets sharply reduced its income from its Asian life business.
De Smet said the results followed a strong first-half performance from Chinese stock market investments, and life insurance in the region had a healthy outlook. “People will have to save for their pension, even when GDP growth is decreasing.”
Other options for spending the cash included increasing Ageas’ stake in its Indian insurance joint venture, IDBI Federal, to up to 49 percent from 26 percent, following rule changes on foreign ownership.
