Foreign joint-venture insurer to sell equities
( 2003-06-11 15:09)
The local partner of Shanghai-based Allianz Dazhong Life Insurance is preparing to sell its holdings in the company ahead of plans to list on the domestic stock market.
Founded in January 1999, the Allianz Dazhong Life Insurance Co. Ltd. was a joint venture between Dazhong Insurance Co., Ltd. based in Shanghai and the Allianz, a Fortune 500 company from Germany, with a registered capital of 200 million yuan (US$24.1 million). The German partner owned 51 percent of the stake, with the Chinese side taking the remaining 49 percent.
In 2002, the joint venture garnered 123 million yuan (US$14.82 million) in premiums, up 122 percent year-on-year, a strong result for foreign-funded life insurers in Shanghai.
The holding sale aims to pave the way for the Chinese assurance firm to gain a listing on the domestic capital market, said a company official.
In late May, Dazhong Insurance Co. Ltd. obtained a letter of supervision, a necessary document for stock market listing, signed by China Insurance Regulatory Commission (CIRC), the industry watchdog.
Zhou Renyong, a senior Dazhong official, said the company was ready to become the first property insurance company listed on the domestic market.
Based on international practice, a life assurance firm will normally experience seven years of losses after starting up.
Despite triple-digital growth in premium revenue, Allianz Dazhong has continued to incur losses, which will affect the planned listing and post-listing re-financing, said Zhou Renyong.
Therefore, Dazhong decided to give up its holdings in the Sino- German joint venture. The move did not indicate doubts about the joint venture's prospects, rather it reflected Dahzong's needs for self development, said Zhou.
Separate company sources revealed that a group of large domestic companies had showed interest in Dazhong's holdings in the joint venture.
Insurance premiums reached 305.3 billion yuan (US$36.78 billion) on the Chinese mainland last year, of which 227.4 billion yuan (US$27.39 billion), or 75 percent, came from life insurance policies.
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