Mitsui Sumitomo Insurance Co. said Wednesday it will buy a 37.5 percent stake in a medium-sized Chinese life insurance company for 4.33 billion yuan ($675 million) to tap the world’s third-largest insurance market.
Pending regulatory approvals, Mitsui Sumitomo, a unit of MS&AD Insurance Group Holdings Inc., will acquire the stake in Shanghai-based BoCommLife Insurance Co. from a unit of Commonwealth Bank of Australia.
BoCommLife Insurance is a subsidiary of state-backed Bank of Communications Co., one of China’s top five banks. In 2016, some 44 percent of life insurance products in China were sold over the counter at banks, according to Mitsui Sumitomo.
Insurers have been expanding their businesses abroad in the face of Japan’s rapidly shrinking population.
The People’s Bank of China announced in April that China will raise foreign ownership limits to 51 percent in life insurance companies this year and fully scrap the restriction in three years.