January 20, 2017 / 10:03 AM / 3 years ago

Tencent, Hillhouse Capital take stakes in Aviva Hong Kong

Tencent comany name is displayed at a news conference in Hong Kong, China March 17, 2016. REUTERS/Bobby Yip/File Photo

LONDON (Reuters) - China’s Tencent Holdings (0700.HK) and hedge fund Hillhouse Capital, headed by billionaire Zhang Lei, are taking stakes in British insurer Aviva’s (AV.L) Hong Kong business, the insurer said on Friday.

Aviva has been refocusing on online insurance products, and on cross-selling between its life and general insurance products such as home and motor insurance.

It said earlier this week it would merge its UK life and general insurance businesses to increase that digital focus.

China’s online finance industry has boomed in recent years, with players ranging from Tencent to e-commerce giant Alibaba Group Holding Ltd (BABA.N) and start-ups offering peer-to-peer lending, wealth management and online payments in a bid to prise business away from traditional banks and insurers.

Hong Kong is home to 161 authorized insurers, with around HK$374 billion ($48 billion) insurance industry in premiums.

The distribution market is dominated by 93,000 insurance professionals, agents and brokers who take a fee on insurance products sold face to face, but the industry’s incoming regulator said last year he would like to see local insurers embracing new forms of financial technology to develop and distribute products.

Tencent, which is among the backers of Chinese Internet insurer Zhong An Online Property and Casualty Insurance, has also invested in online insurer HeTai Life.

Aviva said it and Hillhouse will each hold 40 percent of Aviva Hong Kong on completion of the deal, while Tencent will own the rest.

Aviva's shares were up 0.4 percent at 478 pence by 0954 GMT, when the FTSE 100 index .FTSE was down 0.04 percent.

Additional reporting by Michelle Price in Hong Kong; Editing by Greg Mahlich

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