Home>News Center>China
       
 

Two more insurers to offer shares
(China Daily)
Updated: 2004-02-14 11:17

Two major Chinese insurance companies may list shares this year, following the lead of two State-owned bellwether insurers last year.

Wu Dingfu, chairman of China Insurance Regulatory Commission (CIRC), told reporters on Friday that Ping An Insurance Company and New China Life Insurance Company are expected to complete their initial public offerings this year.

"One will be listed overseas, the other domestically," he said, without elaborating.

Earlier reports said Ping An plans to raise about US$2 billion while New China is targeting up to 4 billion yuan (US$480 million).

China's insurance market needs faster growth to support the nation's economic and social development, and joint-stock reforms are a major way to achieve that, Wu said.

"We encourage and support all qualified insurance companies to list, either abroad or at home," he said.

The PICC Property & Casualty Co Ltd and China Life Insurance Co Ltd became the first Chinese insurance firms last year to list on international stock markets, and were warmly received by investors.

Wu also said the commission is co-ordinating the moves with related departments to allow insurance funds to enter the capital market directly.

Stressing that safety and liquidity should be guaranteed, the official said insurance funds will be allowed into the market in a "step-by-step" manner based on market conditions.

"What we are concerned about is not the narrow investment scope, but how to use the insurance funds well and prevent risks," he said.

Currently, Chinese insurance firms can invest only in bank deposits and some types of bonds, and trade stocks only through securities funds.

They held 52 per cent of their investments, totalling a combined 873.9 billion yuan (US$105 billion) at the end of last year, in bank deposits.

A string of interest rates cuts and a bearish stock market have resulted in declining investment returns for insurance firms. Average investment returns dipped to 3.14 per cent in 2002 from 4.3 per cent in 2001.

The CIRC did not reveal insurance companies' average investment yields for last year, but Yuan Li, the commission's spokesperson, said the average yields rebounded in the latter half of last year and he expected better performance this year as the investment scope broadens.

Wu said the CIRC would selectively approve new Chinese-funded insurance companies this year to bring in fresh blood, especially in the areas of health, annuities and agricultural insurance.

The commission stopped approving new Chinese insurance firms a few years ago. But the number of applications to set up new firms has capped 20, Wu said, with their capital totalling nearly 40 billion yuan (US$4.8 billion).

This year, the CIRC will also encourage insurance firms to develop new insurance products, featuring low premium rates and wide coverage for farmers and those migrant labourers in cities.

Insurance coverage for Chinese farmers is very low, leaving them vulnerable to natural disasters or epidemics like the bird flu.

The CIRC has chosen "two to three" provinces and municipalities for pilot programmes, and is working with other government departments on possible policy favours.

 
  Today's Top News     Top China News
 

CCTV restructuring proof of media reform

 

   
 

Bank of China floating huge bond offering

 

   
 

Jilin governor apologizes for fatal blaze

 

   
 

Moscow police stop raiding Chinese stalls

 

   
 

Senator Kerry blasts Bush, leads in primary

 

   
 

U.S. navy jet fighter F18 is for sale on eBay

 

   
  Jilin governor apologizes for fatal blaze
   
  4-year-old Hong Kong boy survives 7-story fall
   
  Chinese diplomats in Iraq to reopen embassy
   
  Traffic dead down from last year in Guangdong
   
  Gender bias affects male kindergarten teachers
   
  Moscow police stop raiding Chinese stalls
   
 
  Go to Another Section  
 
 
  Story Tools  
   
  News Talk  
  What do you think Western view about China?  
Advertisement