In the U.S. insurer's second attempt to exit Taiwan, MetLife Inc. has agreed to sell its Taiwan life insurance unit to Chinatrust Financial Holding Co. for US$180 million.
Fierce competition and a crowded market have prompted many foreign insurers to leave Taiwan, with American International Group Inc. (AIG) and MassMutual Financial Group being the most recent ones. Their departures accelerated following the global financial crisis, which kicked in in 2008, as some of the insurers badly needed the cash to replenish their capital and diverted the resources to the more profitable and higher-growth markets.
The MetLife deal, which will require approval from Taiwan's financial regulator, will help Chinatrust expand into life insurance, after failing to bid for AIG's Taiwan life insurance unit earlier this year.
Chinatrust Financial, the owner of Taiwan's largest credit-card issuer, Chinatrust Commercial Bank, said in the statement it plans to pay for the acquisition from its own cash reserve and won't need to borrow from banks.
It also said it would keep MetLife's existing 624 employees after the acquisition and that their compensation packages won't be changed for at least two years.
In April 2010, MetLife agreed to sell its Taiwan unit to Waterland Financial Holdings Co. Ltd. (2889.TW), a small financial conglomerate on the island, for US$112.5 million. But the deal was then rejected by the financial regulator, citing doubts over Waterland's financial ability to operate the insurer after the acquisition.