Sovereign Funds Pursue Insurance Companies

Warren Buffet likes insurance companies. In general, insurance companies generate money through premiums and sometimes investment returns. Sovereign wealth funds are keen on investing in insurance companies that have resilient balance sheets and monopolistic positions in various insurance markets.

Investing in an Asian insurance company provides the possibilities of high returns, since most parts of Asia, ex-Japan are still building up their insurance industries. Mature insurance markets like in the United States offer less of a high equity investment return.

Back in 2010, the Kuwait Investment Authority (KIA) committed about US$ 1 billion to the AIA Group Ltd’s initial public offering (IPO). Other public investors participated in the IPO. AIA Group is a major Asian life insurer which was part of the American International Group Inc. In 2011, the Government Investment Corporation of Singapore joined in with investors including Goldman Sachs to purchase AXA’s stake in Chinese insurer Taikang Life Insurance.

AIA Group Limited

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