NCI Has Good Shareholder Structure

Current shareholder structure of New China Life Insurance Co. (NCI), a Beijing-based life insurer, is fine.

As the largest shareholder, China SAFE Investments Limited currently holds 38.815% of New China Life. Baosteel Group Corporation, a state enterprise under the direct administration of the State Council, takes a 17.273% stake in the life insurance company. SINOPEC Assets Management Corporation has a 1.502% stake in the insurance company. Zurich Insurance Plc controls a 20% stake as the foreign shareholder of the insurer.

Under the current situation of stiff market competition, New China Life still puts a heavy focus on the life insurance business. The top management is studying on how to cut down the high policy cost and expand the operation scope of the company.

As for the initial public offering (IPO) in the future, Chairman Kang Dian said that the company has to further raise the solvency as required by China Insurance Regulatory Commission before considering and making preparations for the listing.

During the first nine months of 2010, New China Life was the country's third largest life insurer. In the January-to-September period, New China Life gained the premium revenues of more than CNY 75 billion, up 53% year on year, just following China Life Insurance Co. (601628.SH, 2628.HK) and the southern boomtown Shenzhen-based Ping An Life Insurance Co., Limited.

Months ago, the shareholders' meeting of the life insurer just passed a resolution on its capital expansion. Pursuant to the plan, the company's shareholders are going to take part in the move and subscribe for the additional shares of the insurer at a price of CNY 10 apiece. Capital expansion scale might amount to CNY 14 billion this time.

After that, the company is likely to start up the listing process. It earlier set up a special department in charge of the listing-related affairs. As the majority shareholder of NCI, China SAFE Investments Limited is guessed to inject about CNY 4 billion into the insurer to help NCI raise the solvency adequacy ratio.

By the end of 2009, the total assets of New China Life stood at CNY 206.6 billion, including the net assets of CNY 4.2 billion; and that year's operating revenues were CNY 73.7 billion and the net profits were CNY 2.65 billion. During the first nine months of 2010, the premium revenues of the company hit CNY 82.6 billion, growing 50% compared with the corresponding period of the previous year; and the figure is expected to reach CNY 100 billion in the whole year of 2010.