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Ageas eyes acquisitions in Belgium, Portugal to boost nonlife market share

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Ageas eyes acquisitions in Belgium, Portugal to boost nonlife market share

Ageas SA/NV is interested in boosting its position in the nonlife insurance market in Belgium and Portugal through acquisitions, its CEO said Aug. 8.

"In Belgium we will look at any opportunities that permit us to increase our stake in nonlife because we have 25%-plus market share in life so that is not where we are looking for expansion," CEO Bart De Smet told analysts following publication of the Belgian insurer's second-quarter results.

Troubled Chinese insurer Anbang Insurance Group Co. Ltd. is reportedly considering selling Belgian insurer Fidea NV, which has traditionally focused on nonlife insurance, and De Smet said Ageas "would have a look at it if it did come on the market."

Ageas is also active in Portugal, and De Smet said it would also like to boost nonlife position there, as it already has more than 20% of the life market.

In Asia, where the group is present in China, Malaysia, Thailand, India, the Philippines and Vietnam, the CEO said Ageas had looked at opportunities in Indonesia, but had yet to find a deal at the right price.

"We continue to screen the market but it is not an easy one, and then there are other countries in Asia where we are present or not present where we continuously see how we can increase our footprint," he told analysts.

In China, where Ageas has a joint venture with China Taiping Insurance Holdings Co. Ltd., the plan is to boost existing businesses by hiring more salespeople, De Smet said, adding that Ageas was on track to meet its 2018 net profit guidance of €250 million in China.

Ageas itself has also reportedly drawn interest from a prospective Chinese bidder, Fosun International Ltd., which Bloomberg wrote in July was interested in buying all or part of Ageas. As he did at the time of the report, however, De Smet said the company has not received "any concrete indication of interest from Fosun with respect to Ageas," declining to comment further.

Net profit up

The insurance group reported a 12% year-over-year rise in second-quarter net profit to €193.5 million. Net profit from insurance totaled €176.0 million, down from €222.4 million a year ago. The life business brought in income of €121.4 million, a decrease from the year-ago €144.1 million, while the nonlife business booked net result of €54.6 million, down from €78.3 million a year earlier.

Overall net profit rose primarily because of a swing in the result from Ageas' general account, related to changes in value of securities issued as part of the break-up of the former Fortis group in 2009, from which Ageas was created.

In the second quarter, French lender BNP Paribas SA did not exercise an option to sell its stake in Belgium-based AG Insurance SA, in which Ageas and the French bank have a 75/25 joint ownership. BNP Paribas' decision freed up capital for Ageas, and De Smet said the group would use excess capital for acquisitions and for dividends and/or share buybacks.

The insurer announced a €200 million share buyback program as it reported earnings. The buybacks will start Aug. 13 and end Aug. 2, 2019, bringing total share buybacks to €1.8 billion.

In the U.K., where Ageas has been restructuring its business, COO Antonio Cano said the group was seeing growth in some areas and that the company was still on track to meet its net profit target of €60 million for the year.

"There is a bit of growth but we don't expect that to be huge, certainly not this year given the soft market in the U.K.," he said.