Bank of China Insurance Converted into BoC Subsidiary

Posted on Aug 09, 2010 by Sergio Ulloa (G+)  | Tags: BoC Insurance

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: BoC Group Insurance 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.