In line with international competitors’ moves to expand their operations globally, China Life Insurance (CLI) is mulling to acquire a stake in Agriculturtal Bank of China and sell its policies using its 24,000 branches across China – reported Bloomberg.
According to PricewaterhouseCoopers’ estimates, overseas insurers may increase their market share in China from the current 3.8% to 10% by 2011. However, at present, international life insurers in China are allowed to operate in joint ventures only and forbidden to increase their stake more than 50%. In addition, their growth is also constrained by a slow branch approval process.
By acquiring stake in Agriculturtal Bank of China, CLI wants to defend its 40% market share from rivals like American International Assurance – a unit of AIG, Prudential and Aviva. The fact that CLI’s 50% growth in premium in 2008 was mainly driven by Beijing-based Agricultural Bank, has also prompted the formerto move towards the latter, reported the newspaper.
Liu Jiade, VP of CLI, said: China Life is very interested in the restructuring and initial public offering of Agricultural Bank, and there has been a lot of contact between the two companies. We are optimistic about the prospect of closer cooperation.
