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Two of the six homegrown insurers who submitted applications for their listing programs to the China Insurance Regulatory Commission have won approval.
New China Life Insurance Co and Dazhong Insurance Co of China are the first two insurers that the CIRC has given the green light to. The other four insurance companies are Huatai Insurance Co of China, Taikang Life Insurance Co, Tianan Insurance Co and China Pacific Insurance (Group) Co Ltd, according to Yuan Li, director of the policy department of the CIRC.
"We hope qualified domestic insurers can enhance operating efficiency and transparency, enlarge capital base and standardize management models through a public offering," said Li Kemu, vice chairman of CIRC.
Currently, not a single insurance stock has joined the more than 1,200 listed companies in China's yuan-denominated Class-A share market.
The industry regulator's positive attitude cheered Chinese insurers vying to become the first domestically listed insurance stock, believing fresh net capital can spur their expansion and meet competition from overseas.
"In that way, our financial strength could be greatly enhanced and the corporate governance capabilities will be improved," said Wang Guoliang, chairman of China Pacific, in an earlier interview.
China's insurers have been severely hit by the eight consecutive interest rate cuts on bank deposits since 1997, and the legal investment channels for them are still limited to bonds, bank deposits and securities investment funds.
Industry sources said that Dazhong Insurance and New China Life have already completed the one-year probation period required by the China Securities Regulatory Com-mission before their final initial public offerings in the domestic market.
In a bid to ensure a successful IPO, Shanghai-based property insurer, Dazhong Insurance, has been in talks with several domestic companies to sell its 49 percent stake in its joint venture, Allianz Dazhong Life Insurance Co Ltd, which has not earned a profit since its creation in 1999 with German partner Allianz Group.
China Life, the Chinese mainland's biggest life insurer, plans a US$2 billion IPO in Hong Kong, and Ping An, the second-largest mainland's insurer, is also aiming to raise between US$1.9 billion and US$2.6 billion from its share float in Hong Kong.
(Shanghai Daily June 12, 2003)
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