Insurer looking to sell share
( 2003-06-25 08:38) (China Daily)
Shanghai-based Dazhong Insurance Co, a partner of Germany's Allianz AG, wants to sell its stake in the Allianz Dazhong Life Insurance joint venture in preparation for an initial public offering (IPO), according to company sources.
Zhou Renyong, Dazhong's board secretary, told China Daily the company is planning to get listed on the domestic stock market, possibly next year.
"The timetable is not set yet," said Zhou.
To meet the IPO plan, Dazhong is looking at off-loading its 49 per cent stake in the five-year-old JV with Allianz, Europe's largest insurer. The venture is yet to show a profit.
"Currently, we are mainly negotiating with the Shanghai Automotive Industry Corp for the stake transfer," said Zhou.
Dazhong is expected to become the first domestically-listed insurer, industry sources say.
"Dazhong is dealing with it (the sale) and currently the joint venture runs well," said Xu Qingbo, a senior publicity officer with Allianz Dazhong.
Xu also revealed the JV is preparing to launch new insurance products in the next few weeks.
In 2002, Allianz Dazhong reported 123 million yuan (US$14.82 million) in premiums, up 122 per cent year-on-year, performing outstandingly among life insurance joint ventures in Shanghai.
However, life insurance firms usually experience losses in their first five to eight years.
It is a major reason for Dazhong's push as it has to ensure its profitability before going public, analyst say.
Additionally, Benno von Canstein, general manager of Allianz Dazhong, has revealed an ambition to expand Allianz's life insurance services to other cities like Beijing and Guangzhou.
But current Chinese regulations require a registered capital of at least 500 million yuan (US$60.2 million) for JV life insurer to set up branches around the country.
Allianz Dazhong, which was established in 1998, only has a capital of 200 million (US$24 million).
Zhou said: "We (Dazhong) do have difficulties in affording further investment for the joint venture's expansion, although we know the (life insurance) business in China will be lucrative."
Insurance premiums reached 305.3 billion yuan (US$36.78 billion) in the country last year, 75 per cent of which came from life insurance policies, official statistics showed.
Since 2000, Dazhong has been increasing its investment in its own business, instead of the JV.
Currently, Dazhong's business scope has covered the whole of the Yangtze-River Delta area including Shanghai and Jiangsu and Zhejiang provinces.
(China Daily 06/25/2003 page5)
|
