Sep
2
Taiwanese Regulators Reject Sale of AIG Unit to Primus
Filed Under AIG, China, Hong Kong, Life Insurance | 2 Comments
The Financial Supervisory Commission (FSC) of Taiwan has recently announced it has rejected the planned purchase of the life insurance unit of AIG in Taiwan by Primus Financial Holdings Ltd. It is believed the FSC had concerns about Primus, which is based in the Cayman Islands, may be backed by funds from mainland China, thus in violation of the Taiwan law that prohibits Chinese investment in the financial sector.
Primus has reiterated it does not have a Chinese sponsor.
Back in October 2009 American International Group Inc. (AIG) had announced the US$2.15 billion (EUR 1.7 billion) sale of Nan Shan Life Insurance Co. to a group of investors led by Hong Kong-based Primus Financial Holdings. Also part of the investors group led by Primus is China Strategic Holdings Ltd., also based in Hong Kong.
An official with the Investment Commission of Taiwan explained that the rejection of the sale was in part due to Primus having recently named several new shareholders during the past few months and that was perceived by the SFC as a lack of stability in their operations.
Upon gaining approval of the sale, China Strategic Holdings had a deal to sell to Chinatrust a 30 percent stake in Nan Shan for US$660 million (EUR 516 million). Chinatrust Financial Holding Co., is the third-largest financial company in Taiwan. Towards the end of June 2010, there was an announcement that China Trust intended to walk away from the Nan Shan deal { http://www.globalsurance.com/blog/chinatrust-walks-away-from-nan-shan-deal-with-aig-128320.html }, and now China Strategic is considering to launch an appeal against the decision of the FSC.
On a positive note, China Strategic has been cleared by the FSC of the Chinese funding rumours.
An appeal can be made to the Taiwanese Cabinet within 30 days of having received the official rejection notice. Neither Primus nor China Strategic have insofar received such official notification.
Companies mentioned:
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
Nan Shan Life Insurance Company, Ltd. was established in July 1963. After its restructuring in January 1970, Mr. K.K. Tse, the then Chairman of American International Underwriters, became the first Chairman of the company. In forty years, Nan Shan has become a super insurance company with the most professional management, the best operational performance, and a solid financial foundation. Its agency force has been recognized as the best in Taiwan’s life insurance industry.
Primus is an Asia-based private equity fund focused on acquiring financial services companies. Members of the Primus Group include PFH Partnership Holdings and PMN Capital. Primus is a strategic operator in financial services with significant permanent capital, deep operational experience, and long-term financial capabilities.
Sep
1
China Life Aims to Expand Bancassurance Channel
Filed Under China, China insurance, Insurance Company, Life Insurance | 6 Comments
China Life Insurance Company Limited (China Life), the largest life insurance company in China by premium, has started to shift its sales strategy towards the bancassurance distribution channels. As a first for the company, the bancassurance channel has contributed more than 70% of the company’s insurance premiums for the first half of 2010, becoming a vital premium generator for the company.
Known for having the biggest insurance sales team in the country, China Life has been experiencing growth in the contributions from their bancassurance channel, as per a statement recently released in an interview with Wan Feng, president of this Beijing-based insurance company.
The term ‘bancassurance’ is often used to refer to the Bank Insurance Model (‘BIM’), which describes the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank’s sales channels, including branch offices, in order to sell insurance products. Bancassurance allows the insurance company to maintain smaller direct sales teams as their products are marketed and sold through the bank to customers by bank staff. Replacing the role of an insurance salesperson, bank staff and tellers become the point of sale and contact for the customer. Bank staff are advised and supported by the insurance company through product information, marketing campaigns and sales training.
By the end of June of this year, China Life had approximately 42,700 consumer and wealth management officers assigned to their bancassurance channel, spread over 97,000 branch outlets throughout the country.
China Life intends to accelerate its business expansion during the second half of 2010, to cement its footing in the most populous insurance market in the world, according to details also shared by Mr. Wan.
Insurance Company mentioned:
China Life Insurance Company Limited (China Life) is a People’s Republic of China-based life insurance company. The products and services include individual life insurance, group life insurance, accident and health insurance. The Company operates in four business segments: individual life insurance business, group life insurance business, short-term insurance business, and corporate and other business.
Aug
30
Ping An Achieves Bumper Profits in the First Half of 2010
Filed Under China, Insurance Company | Leave a Comment
Ping An Insurance, the second largest insurer in the world, achieved a 27.9 percent increase in net profit in the first half of the year, reaching US1.65 billion (EUR 1.3 billion), attributing it to a steady growth in sales of insurance products and banking services.
The gross written premiums reported for the first half of the year reached US$15.4 million (EUR 12.1 million), representing approximately 15.8 percent of the total written premiums in China during that period.
After acquiring a 30 percent stake in Shenzhen Development Bank, combined with their efforts to promote their own banking services, Ping An Insurance reported profits from its banking unit to the tune of US$182 million (EUR 143 million), compared to the US$95.5 million (EUR 75 million) reported a year earlier, equivalent to an almost one hundred percent increase year-on-year.
Financial analysts had estimated that Ping An Insurance would achieve a Q2 net profit of US$529.4 million (EUR 415.8 million), when it actually achieved a net profit of US$744 million (EUR 584.5 million), beating estimates by a nearly 41 percent.
Despite the low penetration level of insurance in China, which is among the lowest in the world, Ping an Insurance continues moving towards becoming a major bancassurance distributor, combining its banking unit with Shenzhen Development Bank, aiming to get a larger share of the vibrant financial products market.
Looking forward to the second half of 2010, Ping An anticipates a slowdown caused by the Chinese government’s efforts to reign in their racing economy, compounded by volatility in the stock market and the overall uncertain outlook of the world economy.
Insurance Company mentioned:
Ping An Insurance (Group) Company of China, Ltd. (Ping An) is engaged in providing a range of financial products and services. The Company focuses on three businesses: insurance, banking and investment. The Company operates in five business segments: life insurance business, property and casualty insurance business, banking business, securities business, corporate and other businesses. The Company’s subsidiaries include Ping An Life Insurance Company of China, Ltd. (Ping An Life), Ping An Property & Casualty Insurance Company of China, Ltd. (Ping An Property & Casualty), China Ping An Trust & Investment Co., Ltd. (Ping An Trust), Ping An Securities Company, Ltd. (Ping An Securities), Ping An Bank Co., Ltd. (Ping An Bank), Ping An Annuity Insurance Company of China, Ltd. (Ping An Annuity) and Ping An Health Insurance Company of China, Ltd. (Ping An Health), among others.
Aug
26
Liberty Mutual Group Expands in China Opening Zhejiang Branch
Filed Under China, China insurance, Insurance Company | 5 Comments
Liberty Mutual Group continues its expansion in China by starting branch operations in Zhejiang, after having received the approval of the China Insurance Regulatory Commission (CIRC). Liberty Insurance Company Limited (LICL) had received approval from CIRC to open the branch in Hangzhou, Zhejiang Province in December 2009.
The Chinese Province of Zhejiang has a population of more than 47 million people, and is located 700 miles to the south of Beijing. There was no foreign company operating in Zhejiang offering property and casualty insurance products, which makes Liberty Mutual the first company to penetrate this segment of the market in that part of China.
In addition to its presence in Zhejiang, Liberty Mutual has operations in Chongqing and Beijing. Through the branches at these three locations the company will offer product lines for personal insurance and a wide range of commercial insurance.
Liberty Mutual first opened a representative office in Shanghai in 1996, their expansion in China continued in January of the year 2004 when the company received the approval to open its first insurance office in Chongqing, gaining the strategic position of being the first foreign insurance company to offer property and casualty insurance products in western China.
Then on September 2007, Liberty Mutual received approval from the CIRC to have its Chongqing operation converted to a wholly-owned subsidiary, becoming Liberty Insurance Company Limited (LICL). This gave LICL the distinction of becoming the only Fortune 500 company subsidiary head-quartered in Chongqing.
The President of Liberty Mutual Group, David Long, described the achievements of the company with the following words: “Liberty Mutual’s strategy of being the first insurer to enter markets untapped by foreign companies in China continues to be successful. CIRC’s approval of our Zhejiang branch reinforces our reputation as a strong company committed to providing quality insurance in China.”
Insurance Company mentioned:
Liberty Mutual Group offers a wide range of insurance products and services, including personal automobile, homeowners, workers compensation, commercial multiple peril, commercial automobile, general liability, global specialty, group disability, assumed reinsurance, fire, and surety. Liberty Mutual Group employs over 45,000 people in more than 900 offices throughout the world.
Aug
25
Discovery Health in Agreement with Ping An Over Stake in Ping An Health
Filed Under China, China insurance, Health Insurance, Insurance Company, Medical Insurance | Leave a Comment
South Africa-based health insurance company, Discovery Holdings, has signed an agreement with Ping An Insurance Company to take a substantial stake in Ping An’s health insurance subsidiary, Ping An Health Insurance Company, in order to develop the Chinese health insurance market.
The agreement was signed during a trip to Beijing and Shanghai by South African government officials, including the President Jacob Zuma and 12 ministers, as well as a business delegation of over 320 South African business people. The agreement will see Discovery Holdings take an initial 20 percent stake in Ping An Health Insurance, Ping An Group’s health insurance subsidiary.
Discovery bought Standard Life’s health insurance unit in the UK earlier this year, enveloping it in its joint-venture with Prudential, PruHealth. With health insurance clients in South Africa and the UK reaching more than 2.9 million, Discovery’s experience in running health insurance businesses in both developed and developing insurance markets is seen as a large part in why Ping An picked Discovery for the partnership.
The number of upper- and middle-income households in China reaches 80-90 million, most of which are capable of affording top-up insurance to complement the Social Health Insurance system run by the government. The demand from this segment of the population for insurance products that cover private healthcare services, as well as drugs and diagnostic tests that fall outside the coverage schedule of the Social Health Insurance is increasing, and the government is encouraging health insurance companies to fulfill this need as it tries to roll out the Healthy China 2020 reforms.
Ping An Health Insurance is likely to benefit from the strengths of both Ping An Group and Discovery Holdings. Ping An Health Insurance can springboard off the back of Ping An Group’s scale, distribution network and experience in the Chinese market, while Discovery brings its array of health products, systems and processes, and data and risk management abilities to the table.
Adrian Gore, the Chief Executive Officer of Discovery Holdings said that “Ping An is an excellent partner. The Group is a leader in the Chinese insurance market, providing immediate scale, brand and distribution capability in this rapidly growing market.”
Ping An’s Chief Insurance Officer also sees a bright future ahead, adding that “Both Ping An and Discovery have a vision to fundamentally change the markets in which they operate, and provide consumers with innovative, benefit-rich products. Discovery is a global leader in consumer-engaged health care, and we are excited to have them as a partner. Through this cooperation, Discovery will also be able to share the massive distribution channel and customer base brought by Ping An.”
Insurance Companies Mentioned:
Discovery Holdings
Discovery is a financial services provider based in Johannesburg, South Africa, and was founded in 1992. Discovery offers health insurance and life insurance in different markets as well as investment services and credit cards. They also have a joint venture life and health insurance companies with Prudential called PruHealth and PruProtect, which are structured under the PruProtection banner.
Ping An Insurance Company
Ping An Insurance (Group) Company of China, Ltd. (Ping An) is engaged in providing a range of financial products and services. The Company focuses on three businesses: insurance, banking and investment. The Company operates in five business segments: life insurance business, property and casualty insurance business, banking business, securities business, corporate and other businesses. The Company’s subsidiaries include Ping An Life Insurance Company of China, Ltd. (Ping An Life), Ping An Property & Casualty Insurance Company of China, Ltd. (Ping An Property & Casualty), China Ping An Trust & Investment Co., Ltd. (Ping An Trust), Ping An Securities Company, Ltd. (Ping An Securities), Ping An Bank Co., Ltd. (Ping An Bank), Ping An Annuity Insurance Company of China, Ltd. (Ping An Annuity) and Ping An Health Insurance Company of China, Ltd. (Ping An Health), among others.
Aug
12
Allianz and Volkswagen Extend Old Partnership and Target BRIC
Filed Under Allianz, Auto Insurance, China, Insurance Company | 1 Comment
Allianz Global Automotive and Volkswagen Financial Services have recently signed a letter of intent which will see the two companies agree to continue collaborating and strategically expand their 60 year old successful partnership.
The newly signed letter of intend pays particular attention to the expansion of the business model from a qualitative perspective, focusing on growth, as well as increasing their combined efforts towards achieving increased profitability. The target markets for this renewed partnership agreement go beyond Germany, aiming particularly to the emerging economies of the BRIC countries, comprising Brazil, Russia, India and China.
Worldwide, the car insurance market is fiercely competitive and all the major insurers want a piece of it.
Allianz sees the business done with automotive manufacturers as key to achieve growth in the highly contested global auto insurance market. Through the global strategic positioning brought by the renewed agreement, Allianz intends to offer their automotive partners and their customers improved services in the future.
The biggest market for Volkswagen used to be Germany, and it has now been overtaken by China, whilst Brazil remains their third largest market, with continuing aggressive expansion in both India and Russia.
Both Allianz and Volkswagen see their partnership as a win-win situation. Allianz is able to offer tailored products and multi-channel sales, significantly adding value to the proposition offered to their insurance customers, whilst Volkswagen can continue living up to the promise behind their brand name delivering the quality and service expected by their customers.
For both companies, the objective remains to “forge closer links between sales channels to secure profitable growth in the long term”, according to a joint statement released after the signing of their agreement.
Companies mentioned:
Allianz Group is one of the leading global services providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.
The Volkswagen Group with its headquarters in Wolfsburg is one of the world’s leading automobile manufacturers and the largest carmaker in Europe. The Group operates 61 production plants in fifteen European countries and a further six countries in the Americas, Asia and Africa. Around the world, nearly 370,000 employees produce about 26,000 vehicles or are involved in vehicle-related services each working day. The Volkswagen Group sells its vehicles in more than 153 countries.
Aug
9
Bank of China Insurance Converted into BoC Subsidiary
Filed Under China, China insurance, Hong Kong, Insurance Company | 8 Comments
According to a recent announcement, the China Insurance Regulatory Commission (CIRC) has approved the Hong Kong-based Bank of China Group Insurance Co., Ltd. to transfer 100 percent of its stake in Bank of China Insurance (BoC Insurance) to the Bank of China. With this move, the Bank of China now becomes the sole shareholder of the BoC Insurance.
Before the policy was changed, the Bank of China (BoC) was not allowed to exert direct control over an insurance company. In order to comply, the BoC had indirectly entered the Chinese insurance market through its Hong Kong subsidiary, Bank of China Group Insurance.
BoC Insurance was established by Bank of China Group Insurance, a wholly-owned subsidiary of Bank of China, on 05 January 2005. At present, BoC Insurance has branches in 19 provinces and municipalities around China. BoC Insurance was initially designated to operate as a nationwide property insurance company.
On 11 April 2006, Bank of China and Bank of China Group Insurance Company Limited entered into a Sale and Purchase Agreement whereby the Company conditionally agreed to purchase 51 percent of the shares of BOC Group Life Assurance Company Limited (BOC Life) for a purchase price of US$115.4 million (EUR 86.8 million). BOC Life was incorporated in Hong Kong on 12 March 1997, as a wholly owned subsidiary of BOC Insurance, which itself was wholly owned by the BoC Group Insurance.
The principal business of BOC Life was the provision of life insurance policies to customers in Hong Kong, mainly through the extensive bancassurance distribution network of Bank of China (Hong Kong) Limited, a principal operating subsidiary of the Company. BOC Life, to a lesser extent, was also engaged in writing life insurance policies linked to investment products and retirement scheme management.
For the first six months of 2010, BoC Insurance realised premiums of US$177 million (EUR 133 million).
Upon completion of the share transfer exercise, BoC Insurance will become a wholly-owned subsidiary of Bank of China.
Insurance Company mentioned:
Bank of China Group Insurance Company Limited was established in July 1992. It mainly underwrites general insurance business and provides professional services and comprehensive coverage to customers. Since its establishment, the Company strives to achieve ‘Service Excellence, Product Diversification, Accountability and Customer Satisfaction’ by making effort in developing sources of business, implementing risk management, and adjusting effective marketing strategies. The Company has been in the forefront in the Hong Kong general insurance market for over 10 years.
Aug
6
AXA PPP International Continues Asia Expansion
Filed Under AXA PPP, China, Expat Insurance, Healthcare, Hong Kong | 3 Comments
After having established a dedicated health insurance operation in Asia, AXA PPP International is now in the process of revamping its distribution network to increase their capabilities in the region. Teaming up with AXA Asia General Insurance (AGI), their partnership aims to increase the volume of business for both life and general insurance in Singapore, Malaysia, Indonesia, Thailand, Hong Kong and China, places where AXA has already established a presence.
The AXA PPP – AGI joint venture plans to target local markets first, tightly linking the procured business towards improving the proposition of AXA PPP International to global corporations seeking to cover both expatriate employees and local national employees. In other words, provide expatriate cover as and when the client wants it, plus present them with a local market proposition for local employees.
According to the feedback from global corporate clients of AXA PPP International, it is no longer good enough to just buy a UK private medical insurance scheme and cover their expatriate employees, but they may also want to cover a high number of their local employees in the country where their office is located.
The new Asian operation will initially build relationships with local and regional brokers, whilst looking at how to comply with the legal and regulatory challenges to also work with UK-based brokers.
Insurance Company mentioned:
Originally known as PPP Insurance, the company became part of the Global AXA Group in 1999 and changed its name to AXA PPP in 2002. AXA PPP is now an international health insurance company with over 2 million customers around the world.
Aug
5
Southern China Business Expansion for Manulife-Sinochem
Filed Under China, China insurance, Insurance Company, Life Insurance | 2 Comments
Aiming to further expand their business operations in Guandong province, Manulife-Sinochem has recently announced the opening of a sub-branch in Shantou. Manulife-Sinochem is a life insurance joint venture between the Canadian life insurer Manulife and the China Foreign Economy and Trade Trust Company, a member of the Sinochem group.
Shantou, an important port city located in the southern province of Guangdong, is one of the five special economic zones in China.
The insurance market in China is undergoing rapid development, and the opening of this new sub-branch in Shantou reflects the steady growth in business operations that Manulife-Sinochem has been experiencing in Guandong, becoming a significant life insurer in China.
Making good on their social responsibility, Manulife-Sinochem intends to nurture local talent to build a localised professional team, creating in the process more employment opportunities in the community.
Back in 2002 Manulife-Sinochem opened its first branch in the city of Guangzhou, located in the province of Guandong. Since then, and within that same province, the company continues developing their business operations in the cities of Foshan, Dongguan, Zhongshan, Jiangmen and Huizhou.
Based on figures released by the China Insurance Regulatory Commission (CIRC), during the first five months of 2010 the Guandong insurance market total original premium income of over US$8.4 million (EUR 6.4 million), of which life insurance accounted for US$6 million (EUR 4.6 million), approximately a 72 percent.
Insurance Company mentioned:
Manulife-Sinochem is a joint venture company between Manulife (International) Limited and China Foreign Economy and Trade Trust Company (a member of the Sinochem group). It was the first Chinese-foreign joint-venture life insurance company established in China. Manulife-Sinochem began operations in November 1996. To date the Company has more than 11,000 professionally trained agents and employees, providing financial and insurance services to over 500,000 customers. The company is now developing in over 40 cities including Shanghai and Beijing, and in provinces including Guangdong, Zhejiang, Jiangsu, Sichuan, Shandong, Fujian, Chongqing, Liaoning and Tianjin.
Jul
29
Ping An Health Insurance Approved to Open Zhejiang Branch
Filed Under China, China insurance, Health Insurance, Insurance Company, Medical Insurance | 1 Comment
Ping An Health Insurance Company of China, a wholly owned subsidiary of Ping An Insurance (Group) Company of China, has received approval from the China Insurance Regulatory Commission (CIRC) to set up a new branch in Zhejiang province.
Earlier this year, Ping An Health Insurance was also given approval by the central Chinese insurance regulator to open a branch in Jiangsu province. With the approval of the two new branches, Ping An Health Insurance now has 5 branches in China, although the CIRC says that both of the new branches in Zhejiang and Jiangsu will require operational licenses issued by the local insurance bureaus in the respective provinces.
Ping An Health Insurance already had branches located in Beijing, Shanghai, and Guangdong, and the approval for the two new branches will allow them to expand into the coastal provinces of Zhejiang, the province directly to the south of Shanghai, and Jiangsu, directly to the north of Shanghai. This will afford China Ping An Health Insurance the opportunity to enter into the markets in the relatively affluent cities of Nanjing in Jiangsu and Hangzhou in Zhejiang.
Original premium income in Zhejiang province between January and May, 2010 was RMB 33.04 billion (USD 4.87 billion), of which accident insurance comprised RMB 727 million (USD 107.2 million), health insurance made up RMB 1.05 billion (USD 154.9 million), property insurance RMB 10.86 billion (USD 1.6 billion), and life insurance making up the lion’s share of RMB 20.4 billion (USD 3 billion).
Similarly, the insurance industry in Jiangsu Province generated RMB 57.47 billion (USD 8.48 billion) in cumulative original premium income. Accident insurance accounted for RMB 1.16 billion (USD 171 million), health insurance RMB 1.91 billion (USD 281.8 million), property insurance RMB 13.08 billion (USD 1.93 billion), and life insurance constituting RMB 41.32 billion (USD 6.1 billion).
According to the Chinese Insurance Regulatory Commission, China Ping An Health Insurance received original premium income of RMB 64.38 billion (USD 9.5 billion) between January and May, 2010.
Insurance Company mentioned:
Ping An Insurance Company
Ping An Insurance (Group) Company of China, Ltd. (Ping An) is engaged in providing a range of financial products and services. The Company focuses on three businesses: insurance, banking and investment. The Company operates in five business segments: life insurance business, property and casualty insurance business, banking business, securities business, corporate and other businesses. The Company’s subsidiaries include Ping An Life Insurance Company of China, Ltd. (Ping An Life), Ping An Property & Casualty Insurance Company of China, Ltd. (Ping An Property & Casualty), China Ping An Trust & Investment Co., Ltd. (Ping An Trust), Ping An Securities Company, Ltd. (Ping An Securities), Ping An Bank Co., Ltd. (Ping An Bank), Ping An Annuity Insurance Company of China, Ltd. (Ping An Annuity) and Ping An Health Insurance Company of China, Ltd. (Ping An Health), among others.