PICC Paving the Way for Overall Listing

People's Insurance Company (Group) of China Limited (PICC) considers selling a 55% stake of China Huawen Investment Holding Co. (Huawen Holding), thus paving the way for listing as a whole.

In June 2008, Beijing-based PICC acquired a 55% stake in Huawen Holding for CNY 862 million, thus becoming the controlling shareholder of the latter. In this way, PICC could made indirect investment in the securities, futures, trust and fund sectors. As a result, PICC during the more than two years from mid-2008 to mid-2010 had to integrate the complicated personnel and equity relations with the subsidiaries of Huawen Holding.

PICC currently has 12 professional financial subsidiaries engaged in the property insurance, life insurance, health insurance, assets management, investment and so forth. In the coming year, PICC expects to launch a dual listing in the stock markets of China's Mainland and Hong Kong. By now, PICC's total assets have exceeded CNY 400 billion and it has had assets of more than CNY 800 billion under the management, with thee capital utilization balance standing at CNY 350 billion.

PICC Life, the life insurance unit of Beijing-based PICC, has been performing strongly in the profit making during the five years since its inception. Over the past year, the life insurer realized the net profits of CNY 44 million and during the first 10 months of this year, the company realized the net profits of CNY 546 million. On the one hand, the brand advantage of the parent group PICC is a strong support for the development of PICC Life; and on the other hand, the heavy focus on bancassurance business is another driving force for its growth.

Days ago, news said that PICC as the parent group plans to increase the capital base of its life insurance arm PICC Life, President Wu Yan of the parent group disclosed. As the parent company, PICC currently takes an 80% stake in the life insurance arm.

PICC Property and Casualty Company Limited (PICC P&C, 2328.HK), the Hong Kong-listed non-life insurance platform of Beijing-based PICC, is the major profit contributor of the parent company now. From this January to August, the Beijing-based non-life insurer earned total premium revenues of CNY 105.1 billion, an increase of 22.6% year on year. Solvency adequacy ratio of PICC P&C stood at 117% by the end of this June. However, the market share of the company declined one percentage point from last yearend to 39% in the first half of this year.