View this article online: https://www.insurancejournal.com/news/international/2005/04/13/53710.htm
China’s PICC Property and Casualty Co. Ltd., the country’s largest P/C insurer, is poised to enter the rapidly expanding Chinese life insurance market with the announcement that it is forming a joint venture with other Asian partners from Thailand, Hong Kong and Japan.
PICC, in which AIG holds a 9.9 percent stake, has received approval from the Chinese Insurance Regulatory Commission (CIRC) to form the new life insurer in partnership with Sumitomo Life Insurance of Japan, Hong Kong-based Asia Financial Holdings Ltd. and Thailand’s Bangkok Bank.
The new company would compete directly with China Life Insurance Co., the market leader, and Ping An Insurance Co. of China. PICC will control 51 percent of the new company, which, according to a report from the Associated Press, has a registered capital of 1 billion Chinese yuan ($121 million, 93 million euros). Sumitomo Life has agreed to buy a 29 percent stake; Asia Financial and Bangkok Bank will each have a 10 percent stake.
The AP reported that according to Government statistics, China’s total life insurance premium revenue hit 285.1 billion yuan ($34.4 billion, 26.5 billion euros) in 2004, compared to just 109.0 billion yuan ($13.2 billion, 10.2 billion euros) for the property and casualty sector that PICC dominates.
However, China’s P/C sector is growing faster than the life sector, registering a 25 percent increase in gross premiums last year, compared to 6.8 percent for life insurance.