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Tata, AIA eye PNB MetLife India deal; Chinese insurer revises IPO plans

S&P Global Market Intelligence offers our top picks of insurance news stories and more published throughout the week. Please note that some entries may have links to third-party sources that may require a subscription.

Tata, AIA eye PNB MetLife India acquisition

* Indian conglomerate Tata Sons Ltd. and partner AIA Group Ltd. are looking to acquire a 70% stake in PNB MetLife India Insurance Co. Ltd. and then merge the company with their joint venture Tata AIA Life Insurance Co. Ltd.

* Only one bidder backed by Chinese capital has reportedly submitted a final bid for Korea Development Bank's 85% stake in South Korea's KDB Life Insurance Co. Ltd. The bank is seeking to raise 900 billion won from the sale.

* Tokai Tokyo Financial Holdings Inc. will reportedly buy Eternal Co., an insurance agency with a countrywide sales network, as part its efforts to attract younger customers.

IPOs, other capital raises

* Chinese online insurer ZhongAn Online P&C Insurance Co. has changed its plans for an IPO and is now looking to list its shares in mainland China, Bloomberg News reported. The company, which is backed by Ant Financial and Tencent Holdings Ltd., previously had said that it was looking to list in either Hong Kong or the U.S. as early as 2017.

* State Bank of India plans to kick off the process to list its insurance subsidiary SBI Life Insurance Co. Ltd. in fiscal 2017-2018, Moneycontrol reported, citing Arijit Basu, managing director and CEO of the insurer. SBI Life was valued at 460 billion rupees in December when State Bank of India said it will sell a 3.9% stake for 17.94 billion rupees.

* Insurance Australia Group Ltd. completed its capital note offer, raising A$404.1 million of Additional Tier 1 capital.

* MS&AD Insurance Group Holdings Inc. will issue ¥100 billion of subordinated unsecured bonds in two series maturing Dec. 25, 2076. The bonds could be redeemed on or after Dec. 26, 2021.

Ratings actions

* S&P Global Ratings affirmed and removed from CreditWatch negative the ratings of Asia Capital Reinsurance Group Pte Ltd. The outlook is stable.

* RAM Ratings reaffirmed the AA2/Stable/P1 insurer financial strength ratings of Hong Leong Assurance Bhd.

* Moody's raised its outlook on Fosun International Ltd.'s Ba3 corporate family rating to positive from stable following the company's sale of assets. The company's Ba3 corporate family rating was affirmed.

In other news

* Swiss Re says Asia is set to become the biggest insurance market in 2017, thanks to its growing middle class, low insurance penetration and China's One Belt, One Road policy, The Nation reported. Clarence Wong, chief economist for Asia, expects premium income from the region would surpass that of North America and the European Union.

* The Monetary Authority of Singapore is plotting an integrated ASEAN insurance market that will facilitate a wider distribution of risk through cross-border provision of solutions and open access to each market, the Singapore Business Review reported. As part of that effort, MAS is planning to liberalize key insurance markets, starting with the catastrophe insurance.

* India's HDFC ERGO General Insurance Co. Ltd. and Vakrangee Ltd. entered into a corporate agency agreement for the distribution of general insurance products.

* XL Innovate, a venture fund of XL Catlin, is investing US$4 million in Stonestep, an insurance startup that seeks to streamline how microinsurance is sold in emerging markets, the Insurance Journal reported. Stonestep plans to grow in Asia, starting with Myanmar. The company intends to provide access to basic insurance products through its technology platform.

Featured on S&P Global Market Intelligence

Sompo eyeing more M&A in developed economies to grow overseas income: Following its US$6.3 billion move for U.S. insurer Endurance Specialty Holdings Ltd. in October, Sompo Holdings Inc. plans to conduct even more M&A to up the share of overseas income in its total profits.

China's new reinsurers unlikely to challenge established names in near future: A number of domestic players are looking for entry to China's underdeveloped reinsurance market, though there is unlikely to be an overhaul of the sector any time soon.