Foreign Side Withdraws from Haier New York Life

As New York Life Insurance Company has withdrawn from Haier New York Life Insurance Co., the joint venture has changed its name into Haier Life Insurance Company Limited.

The U.S. insurer has already transferred a 25% stake of Haier New York Life to Qingdao Haier Investment and Development Co. and another 25% stake to Meiji Yasuda Life Insurance. In this way, Haier gets a 70.76% stake in the new insurance joint venture and the Japanese side has a 29.24% stake. According to media, both the Chinese and foreign parents are going to jointly invest CNY 345 million to the Shanghai-based venture, thus help it raise the registered capital up to CNY 1.18 billion.

Haier New York Life started operation in 2002. During the eight years of operation, the company did not perform well. According to the regulatory department China Insurance Regulatory Commission (CIRC), Haier New York Life was the No.21 among a total of 28 joint venture life insurers in China's Mainland.

New York Life Insurance explained that it made the decision after careful evaluation. After the move, the U.S. insurance company vows to focus on other markets. Actually, the foreign insurer as early as last October had begun shrinking the business in Asia by selling the life insurance businesses in Hong Kong and South Korea to ACE Insurance Limited.

Ever since the entry of these foreign insurance companies into China, they have not progressed fast under the competition with Chinese players. Currently, the Chinese sides are the controlling shareholders of nine Sin-foreign life insurance companies.

Some time ago, China Construction Bank 601939.SH, 0939.HK)-led investment consortium won the bid for a 50% stake that China Pacific Insurance (Group) Co. (CPIC, 601601.SH, 2601.HK) held in Pacific-Antai Life Insurance. The Beijing-based property lender got a 1% stake in the financial center Shanghai-based insurance joint venture. In addition, ING as the foreign parent of Pacific-Antai Life Insurance had already inked an equity transfer agreement with the Chinese bank, to sell another 50% stake that it took in the life insurer to the lender.

Also, three other Chinese state-owned commercial banks have become the shareholders of the insurance companies via equity investment. Among them, Industrial and Commercial Bank of China takes a controlling 60% right in AXA-Minmetals Assurance Co.; Bank of China is the controlling shareholder of BOC Insurance and Heng An Standard Life; and Bank of Communications controls a 62.75% stake in BoComm Life Insurance Limited.