Paris-based AXA SA will become the first foreign insurer to own 100 percent of a top 20 property and casualty insurance company in China once it receives regulatory approval for the acquisition.

With a 50 percent stake in AXA Tianping Property & Casualty Co, AXA announced on Monday it had entered into an agreement with the domestic shareholders to acquire the remaining 50 percent stake in the company for a total of 4.6 billion yuan ($662 million).

The transfer price is around 10.87 yuan per share, according to Hubei Biocause Pharmaceutical Co, one of the five domestic shareholders.

"This is a 'first of its kind' transaction in the Chinese insurance market whereby a leading P&C insurer, with a nationwide footprint, will be fully owned by a foreign company. The acquisition further reaffirms our conviction that our operations in China will be a key growth engine of the Group and in its preferred segments," said Thomas Buberl, chief executive officer of AXA.

As the only foreign invested company in the top 20 P&C insurers in China, AXA Tianping ranked 15th among China's P&C insurers in 2017 with 1 billion euros ($1.13 billion) of gross written premiums.

The Shanghai-based company, founded in 2004 with registered capital of 846 million yuan, has developed a national footprint with 25 branches and 93 sub-branches covering 20 provinces and regions.

It ranked sixth in the market in terms of direct motor insurance, according to the China Banking and Insurance Regulatory Commission, with motor insurance contributing 91 percent of gross written premiums. It also sells short-term health insurance products.

China is ramping up the efforts to further open up its financial sector in a steady manner. The China Banking and Insurance Regulatory Commission announced on Sunday it had granted approval to the Munich-headquartered Allianz SE regarding its application to commence operational preparations for Allianz (China) Insurance Holding Co Ltd, the first foreign-funded insurance holding company in China.

The regulator raised the cap on foreign ownership of life insurance joint ventures from 50 to 51 percent this year and will remove the restriction entirely in three years.

"The further opening of China's insurance sector will enrich the supply of insurance products to meet diversified demands of customers. It will also improve the quality and the level of internationalization of Chinese insurance professionals and set higher requirements for regulators," said Guo Jinlong, head of the research department on insurance at the Institute of Finance and Banking at the Chinese Academy of Social Sciences, in an interview with Financial News.

Statistics from the CBIRC show that during the first nine months of 2018, the premium income for P&C insurance in China increased by 10.69 percent year-on-year to 800.34 billion yuan, and that for health insurance grew 21 percent year-on-year to 433.7 billion yuan.

Despite this growth, P&C insurance penetration remains low, with the premium income for P&C insurance in China accounting for only 1.2 percent of the nation's GDP in the same period.

Gordon Watson, CEO of AXA Asia, said the share transaction will consolidate the company's position as the No 1 foreign insurer in China.

"With full ownership and management control of AXA Tianping, we will further accelerate the deployment of our strategy to create a leading insurer that champions healthcare and mobility solutions," he said.