KPMG Hong Kong's monthly insurance news summary

This publication is a summary of publicly reported information, the accuracy of which has not been verified by KPMG.

Hong Kong
Manulife Hong Kong has reported a 29 percent increase in net profits to HKD 556.4 million for the second quarter of the year, thanks to strong sales of wealth management services. The Group expects further expansion in the mainland and hopes to obtain three to four more operating licences there by the end of this year.

Asia Financial Holdings (AFH), parent of Hong Kong-based insurer, Asia Insurance, has said that its chairman plans to increase his stake in AFH to 43.65 percent from 35.07 percent for HKD 2.1 billion. The plan is subject to shareholders' approval.

China
China Life Insurance Company (China Life) has said that it plans to issue 1.5 billion shares on the Shanghai Stock Exchange at a price of RMB 1 each, accounting for 5.3 percent of its enlarged capital. The plan is subject to shareholder and regulatory approval. Separately, China Life has opened an office in Hong Kong. Furthermore, the insurer has said that it will acquire stakes in China Merchants Bank and Industrial and Commercial Bank of China (ICBC) during the banks' IPOs in Hong Kong.

Insurance Australia Group (IAG) has reportedly received regulatory approval to acquire a stake in China Pacific Property Insurance Company (CPIC). IAG has reportedly agreed to acquire 24.9 percent of CPIC for Australian dollar 350 to 375 million.

Ping An Insurance (Group) reportedly plans to issue co-branded credit cards in collaboration with Shenzhen City Commercial Bank (SCCB) . The plan is awaiting regulatory approval. Earlier, Ping An has agreed to acquire a 89.24 percent stake in SCCB for RMB 4.9 billion.

New China Life Insurance Company is reportedly considering acquiring a stake in Guosen Securities Company for RMB 100 to 160 million.

HSBC has said that it plans to set up a life insurance joint venture in the mainland by the end of this year and is looking for a domestic partner. The joint venture will be mainly managed by HSBC Insurance.

China Life Insurance (Group) Company has acquired 1.75 percent stake in China's Industrial Bank for RMB 392.5 million through an auction.

Allianz Insurance Company's Guangzhou Branch has set up sales services centres in Dongguan and Foshan. Separately, Allianz China Life Insurance Company has also opened two sales services centres in Ningbo and Shaoxing in Zhejiang province.

Aviva-Cofco Life Insurance Company reportedly plans to set up two training centres in Beijing and Guangdong to provide training to insurance brokers and agents in the mainland on a trial basis.

China Continent Property & Casualty Insurance Company has reportedly signed an agreement with ICBC to cooperate in banking and insurance businesses.

Taiping Pension Company has reportedly teamed up with Fortis Haitong Investment Management Company to jointly tap the domestic enterprise pension market.

Hang Seng Bank is reportedly keen in investing in a domestic life insurance company and is looking for a partner to set up a life insurance joint venture in the mainland. Separately, the bank has launched insurance agency services through its branch in Beijing, after Shanghai, Guangzhou and Shenzhen, to distribute products of Ping An Property & Casualty Insurance Company.

Shenzhen COSCO Insurance Brokers, a new company jointly owned by member companies of China Ocean Shipping Companies Group (COSCO), has been set up in Shenzhen. The new company with a registered capital of RMB 5 million will provide insurance brokerage and risk management services, including marine insurance and re-insurance as well as non-marine insurance.

RBC Life Insurance Company, an insurance arm of Royal Bank of Canada, has opened a representative office in Beijing.

Manulife-Sinochem Life Insurance Company has set up a branch in Sichuan province in western China.

China Reinsurance (Group) Company will reportedly receive a capital injection of up to RMB 10 billion from the government's investment arm, Central Huijing Investment Company.

Taiwan's China Life Insurance Company has announced that it has received regulatory approval in Taiwan to form a joint venture in the mainland and is currently looking for a mainland partner. The insurer has had a representative office in Beijing since 2005.

Liberty Mutual Group has said that it will give priority to the development of personal and small and medium-sized enterprise insurance in its China business. The insurer has a branch in Chongqing in western China.

In brief

China

• The China Insurance Regulatory Commission (CIRC) has issued two sets of rules governing overseas insurance-related companies set up by domestic insurers and investments in foreign insurance-related companies by domestic non-insurance companies. Among other things, domestic insurers, which meet certain criteria set out in the rules, are allowed to apply for setting up branches, insurance companies and insurance brokerages in overseas countries, or acquiring foreign insurers and foreign insurance brokerages. The rules took effect on 1 September.

• An official from the CIRC has said that the CIRC will release rules this year allowing domestic insurers to set up fund management companies. In addition, the CIRC is to speed up the implementation of measures allowing qualified insurers to buy foreign exchange for investment in overseas markets.

• The CIRC has issued rules outlining detailed regulatory requirements for health insurance business, including product design, product sales, information disclosures, and co-operation between insurers and medical services providers. The rules took effect on 1 September.

• The latest data from the CIRC shows that the insurance sector reported a 13.3 percent year-on-year increase in premium income to RMB 342 billion in the first seven months of the year. Of these, premiums from property insurance reached RMB 88 billion, rising by 14.6 percent, while those from life insurance stood at RMB 254 billion, up by 12.9 percent. Total assets of the insurance sector stood at RMB 1.74 trillion at the end of July.

Sources: Insurance Day, South China Morning Post, Xinhua Economic News Services, Asia Insurance Review and various insurance websites.

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This publication is a summary of publicly reported information, the accuracy of which has not been verified by KPMG. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.