Insurance Intermediaries Busy with Listing

Huakang Financial Service, Inc. and China Meichen Financial Group, two insurance intermediaries based in the southern Chinese province Guangdong, are planning to go public in 2011.

The former prepares to get listed on the stock market of the United States, probably on the NASDAQ Global Market; and the latter intends to become publicly traded on the main board of the Hong Kong Stock Exchange.

In the middle of this year, Meichen Financial got the second round of venture capital investment of HKD 45 million. Over the past year, the premiums of the policies sold by the company nearly amounted to CNY 830 million, thus representing a year-on-year increase of 130%.

Actually, Guangdong has always taken a leading position in the country's insurance intermediary sector. Many of local insurance intermediary institutions have made a turnaround from losses or begun making profits. During the first nine months of this year, those insurance intermediary institutions of the province saw a 1.5% rise in the market share in terms of the premium revenues.

In addition to Huakang Financial and Meichen Financial, there is another renowned insurance intermediary called CNinsure Inc. (Nasdaq: CISG), which had already debuted on NASDAQ.

This year, more insurance institutions of China's Mainland are to go public. Among them, for instance, China Reinsurance (Group) Corporation (China Re) and New China Life Insurance Co. (NCI) are expected to get listed sooner or later. Both companies are the subsidiaries of China Investment Corp. (CIC). Based in Beijing, China Re earlier denied the rumor, saying that it had not submitted any IPO application to related regulatory departments. Still, the reinsurance company is guessed to have big possibility to go public circa the last three months of this year.

Currently, China SAFE Investments Limited as the subsidiary of CIC takes an 85.5% stake in China Re. With the registered capital of CNY 36.15 billion, China Re currently is the largest reinsurer in Asia and the fifth largest reinsurer in the world.

As for NCI, reports said that the life insurer has set up a special department responsible for the listing-related affairs. During the first eight months of this year, NCI's total premiums increased by 60% year on year to CNY 67 billion.

As the majority shareholder of NCI, SAFE Investments is guessed to inject about CNY 4 billion into the insurer to help NCI raise the solvency in order to meet the regulatory requirement before the listing.