(Yicai) Aug. 23 -- Germany's Ergo Group has joined a club of foreign firms that own a majority stake in their life insurance joint ventures in China to gain investment opportunities amid easing regulation.

Ergo hiked its direct and indirect stake in Ergo China Life Insurance  to 65 percent from 50 percent as the related application was approved, the Dusseldorf-based company said in a statement yesterday, without disclosing financial details of the deal. After that, Shandong State-owned Assets Investment Holding will have 35 percent of the equity, a similar number as the stake held directly by Ergo.

Moreover, shareholders of Ergo China Life Insurance will jointly inject CNY400 million (USD55.1 million) into the JV to support its long-term development.

Ergo is following in the footsteps of global giants such as AIA Group, Allianz, as well as HSBC Life which have bought more shares in their life insurance JVs in China to gain control of the companies after the top insurance industry regulator removed overseas partners' ownership cap in March 2021.

The Chinese insurance market is filled with development opportunities and this is also the strategic focus of Ergo's global businesses, per Jurgen Schmitz, chief executive of Ergo China. The purchase is another significant milestone for Ergo in building its insurance value chain in the Asian country, he added.

Founded in 2013, Dehua Ergo Life Insurance is Shandong province's first life insurance company with a nationwide scope. In the five years ended 2022, the compound annual growth rate of the firm's premium income was 30.8 percent. However, the JV is in the red as its total loss tallied about CNY2.2 billion (USD302.9 million) as of Dec. 31, 2022, according to its financial reports.

Ergo entered the Chinese market in 2005, offering life and health insurance products. In 2021, the firm acquired nearly a quarter of Taishan Property and Casualty Insurance's equity to tap into the Chinese property insurance market.

Editors: Tang Shihua, Emmi Laine