Insurance Australia Group Ltd (IAG) is to spend about $100 million to take a 20 per cent stake in a general insurer in China.The strategic share in Bohai Property Insurance will give IAG representation on the Chinese company's board and senior management roles including a deputy general manager.
The transaction, which remains subject to regulatory approval, is expected to be completed by the end of calendar 2012 and will be funded by internal resources.
"Bohai Insurance is an attractive partner and provides an exciting opportunity for us to meet our long-held ambition of entering China's general insurance market," IAG chief executive Mike Wilkins said in a statement.
IAG has targeted Asia in its growth strategy and wants to generate 10 per cent of its gross written premium from the region by 2016.
It already has businesses in Malaysia, Thailand and India.
Bohai Insurance is mainly a motor insurer, generating annual gross written premium of over $200 million, IAG said.
It is on track to post an operating profit by fiscal 2014, IAG said.
Bohai Insurance is based in Tianjin in China's north east, has 265 provincial and city branches and employs about 3,000 people.
At 1518 AEST, IAG shares were up six cents, or 2.01 per cent, to $3.04.
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