Sun Life Financial expects premium growth at its China insurance venture to more than double this year, a senior executive said, after receiving approval to turn the company into a Chinese-owned entity.
Sun Life Everbright will also likely begin making a contribution to Sun Life’s overall bottom line in about five years and is aiming for it to be among China’s top 10 insurance companies, Dikran Ohannessian, president of Sun Life Financial Asia, told Reuters.
“We’ve got a good bunch of partners in China who we work very well with, and we’re very confident about our future there,” Ohannessian said.
“Our shareholding is smaller now, but we still have seats on the board and we’re growing our position in China, which is important to us.”
China’s insurance regulator approved Sun Life Everbright’s proposals to raise funds and revamp its shareholding structure earlier this month, in a move that will see Sun Life’s stake in the Chinese insurer being diluted in return for approval in becoming a Chinese-owned entity.
Sun Life Everbright collected about 1.26 billion yuan ($185 million) in premiums in 2009, the company said, and will be focusing on its bancassurance and group insurance businesses as it further ramps up on its growth efforts.
“The outer core of every product may seem different, but inside we’re looking at the same risk management models which is something Sun Life is very strong in from our years of experience,” Ohannessian said.
China’s insurance market is dominated by homegrown companies such as China Life and Ping An, but the country’s low insurance penetration rate has made it an attractive target for many companies.
Sun Life Everbright was set up in April 2002 as a 50/50 joint venture between Canada’s Sun Life Financial and China’s Everbright Group.
Sun Life will retain its four seats on the Chinese venture’s board, but the number of seats will be raised to 12 from the current eight, Ohannessian said.
“We’re still very involved in the business,” he said. “Our president, our CEO, they still fly in regularly for talks with Everbright. It’s not like we only meet once every quarter. It’s an ongoing conversation.”
China Everbright Bank, Everbright’s banking unit and China’s 11th biggest lender, is aiming to complete its $2.9 billion Shanghai initial public offering by mid-August, but Ohannessian said it was too early to say if Sun Life Everbright will go public.
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