Top Biz News

Insurers follow route of banks to domestic IPO

(Shanghai Daily)
Updated: 2007-02-12 09:17

China's rebounding stock markets - the Shanghai Composite Index surged 130 percent last year - have attracted big players.

Top priority

More big-name insurers are expected to go public either on the mainland or overseas.

China Reinsurance (Group) Co, the country's sole reinsurance company, received a US$4 billion government bailout as a step prior to listing.

The country's top insurance regulator has made it a top priority to restructure the company, attract strategic investors and get it listed this year.

China Reinsurance has already set up a department for restructuring and preparing for a future listing.

The path is similar to China's major state-owned banks. ICBC,Bank of ChinaandChina Construction Bankreceived a combined US$60 billion in bailouts from the central government before they allied with overseas investors and listed in Shanghai and/or Hong Kong.

China Pacific Insurance, the country's third-biggest insurer, and New China Life Insurance have also considered a stock listing.

"The central government supports insurers in a move to boost capital and improve shareholding," theChina Insurance Regulatory Commissionsaid.

China's insurance sector, which lags the banking industry in terms of scale, is growing rapidly amid increased demand for financial protection.

The idea of purchasing home, auto and life insurance is becoming more popular in a country where household savings top US$2 trillion. The authority is also encouraging people to buy insurance to scrap its cradle-to-the-grave social security system.