PICC Accelerating Dual Listing

People's Insurance Company (Group) of China Limited (PICC), the parent of PICC Property and Casualty Company Limited (PICC P&C, 2328.HK), aims to get listed in Hong Kong and China's Mainland as a whole.

Currently, Beijing-based PICC is the parent of 12 professional financial firms, the businesses of which cover the life insurance, property and casualty insurance, health insurance, assets management, investment and so forth. All these subsidiaries are expected to further expand the assets.

Now, the group is busy selecting strategic investors. It has the net assets of about CNY 42.3 billion and it has managed CNY 856.2 billion worth of assets; but PICC has a lower-than-150% solvency adequacy ratio, an obstacle for its realty investment and private equity investment.

Listed in Hong Kong, PICC P&C is the parent group's major profit contributor. From this January to August, the listed property 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. Based in Beijing, the non-life insurer is believed to be able to further raise the solvency adequacy ratio via various ways. However, the market share of the property insurer declined one percentage point from last yearend to 39% in the first half of this year.

PICC Life Insurance Company Limited in the first eight months of this year reaped the premium revenues of CNY 59.44 billion, up 60.5% year on year. This year, the life insurer has set the goal to achieve the premium revenues of CNY 68 billion. Currently, PICC Life has CNY 8.8 billion in the registered capital. As the bond investment and equity investment platform, PICC Capital Investment Management Company Limited in the first six months of 2010 conducted investigations to 29 bond investment projects and 67 equity investment projects.

In addition, both Taikang Life Insurance Co. and China Reinsurance (Group) Corporation (China Re) have submitted the applications for getting listed in China's A-share market. Insurers' products structure, investment management capability, solvency, risk control ability and employees' stocks will all be investigated by relevant regulatory departments before they are approved of the listing plans. As required by China Insurance Regulatory Commission (CIRC), the regulator is to take supervisory measures to those insurance companies with the solvency adequacy ratio of less than 100%. Currently, both Taikang Life and China Re have had a higher-than-200% solvency adequacy ratio.