China Insurers Keen to Replenish Capital

Insurance companies in China are keen to replenish their capital base in the fourth quarter, laying a foundation for future expansion.

China Insurance Regulatory Commission recently approved BoCommLife Assurance Company Ltd., AXA-Minmetals Assurance Co., Ltd. and Cathay Life Insurance Co. to increase the registered capital by CNY 300 million, CNY 200 million and CNY 400 million, respectively.

Beijing-headquartered Minsheng Life Insurance Co. is set to add its registered capital to over CNY 5 billion from CNY 2.7 billion. With over CNY 18 billion total assets, the insurer has 20 province-level branches, 144 city-level central sub-branches and 546 county-level outlets.

New China Life Insurance Co., the country's third largest life insurer by premium, reportedly intends to kick off a CNY 14 billion capital increase by end-2010.

Forty-six insurers in China have completed 69 capital increases from 2009 to September 2010 with approved increment of CNY 45.85 billion. Ping An Property Insurance Co. finished CNY 8 billion capital increase, the largest.

Several other insurers have won regulatory approval for issuing of subordinated bonds this year to replenish the second-tier capital.

With the sustainable economic growth and upcoming aging society, an insurance boom is expected to come in China in coming ten years.