Brewing for more than a year, the equity transfer of HSBC life has taken a key step.
on December 30, HSBC Insurance (Asia) announced that it had received a reply from the Shanghai Banking and insurance regulatory bureau to approve the change of shareholders of HSBC life, a joint venture established with national trust with 50% equity respectively, and the share ratio of HSBC Insurance (Asia) was increased to 100%.
This is also the third wholly-owned foreign life insurance company successfully approved after AIA life and Allianz life under the background of expanding the opening of the financial industry.
HSBC Insurance (Asia) is a wholly-owned subsidiary of HSBC Holdings. Liao Yijian, CO chief executive of HSBC Asia Pacific, said: “the growth of HSBC Group’s insurance business is very important for us to achieve our strategic goal of becoming a leading wealth management organization in Asia. Wholly controlling HSBC Life means that we have taken a step towards this goal and confirmed our commitment to strengthen the expansion of wealth management business in China.”
HSBC will wholly own HSBC Life
HSBC Life was established in June 2009 by a joint venture between HSBC Insurance (Asia) and national trust, with each party holding 50% equity. The registered capital of the company is RMB 1.025 billion and its headquarters is located in Shanghai.
HSBC Life currently operates in 10 major cities in the mainland, including Shanghai, Beijing, Tianjin, Hangzhou, Guangzhou, Shenzhen, Foshan, Dongguan, Zhuhai and Zhongshan.
In 2020, China officially abolished the restrictions on the proportion of foreign capital of joint venture life insurance companies operating life insurance business. In May of that year, HSBC announced that it would acquire 50% equity of HSBC Life held by national trust.
The approval means that the acquisition has taken a key step. After this equity change, HSBC life will become a wholly-owned subsidiary of HSBC Insurance (Asia).
Hu min, general manager of HSBC life, said: “the increase in HSBC Life shares reflects the group’s firm confidence in China’s insurance market. We are particularly optimistic about the pension and health security market, which is ushering in a golden period of development. By 2030, the market scale of China’s pension industry is expected to reach 13 trillion yuan, in which the insurance industry will play an important role.”
According to him, in recent years, HSBC life has focused on increasing investment in science and technology and talents, and introduced more compound management talents with multiple backgrounds, which has effectively promoted the improvement of product innovation, investment ability and service ability.
“In the future, we will adhere to the original intention of the insurance industry to create long-term value, integrate the international linkage advantages of HSBC Group, and make more distinctive innovations in pension finance, green insurance and digital insurance.” Hu Min said.
In fact, in recent years, HSBC has been continuously distributing the Chinese market. In addition to HSBC life, HSBC also established a financial technology services company in China last year, which officially opened in January this year.
From the perspective of HSBC’s overall business layout, in February 2020, HSBC created the wealth management and personal banking business segments, integrating and strengthening the linkage between the original retail banking, wealth management, asset management, insurance and private banking businesses. According to the 2021 interim report, the profit of HSBC Insurance business accounts for about one third of the profit of its global wealth management and personal banking business, accounting for 12% of the group’s profit.
speed up the layout of foreign insurance
Over the past two years, China’s financial industry has accelerated the pace of opening to the outside world, and the Bank Of China Limited(601988) industry and insurance industry have launched a number of major opening-up policies. In 2020, China further abolished the restrictions on the shareholding ratio of foreign life insurance companies, which provided a policy basis for foreign insurance companies to expand their shareholding ratio in joint venture life insurance companies.
In July 2020, AIA life officially became the first wholly foreign-owned life insurance company in China. In just over a year, AIA life has successively opened two provincial branches in Sichuan and Hubei, covering 9 provinces and cities in China.
On November 17 this year, Allianz China Life disclosed that it had received a reply from Shanghai Banking and Insurance Regulatory Bureau, approving CITIC Trust to transfer its 49% equity of Allianz China life to Allianz China Insurance Holdings. After the transfer, Allianz China Insurance Holdings held 100% equity of Allianz China life.
In addition to the field of life insurance, the overall layout of foreign insurance industry in the Chinese market is accelerating. In March this year, the China Banking and Insurance Regulatory Commission issued the
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The decision has become a milestone in the opening of the insurance industry to the outside world.
previously, foreign insurance companies could only operate property insurance companies solely in China, and could not set up group companies, life insurance companies and other business forms solely. Now these barriers have been broken, and wholly foreign-owned foreign life insurance, foreign endowment insurance and foreign insurance asset management companies have opened or are under preparation.
On January 16, 2020, Allianz China Insurance Holdings officially opened in Shanghai, becoming the first wholly foreign-owned insurance holding company in China. In September this year, Allianz Insurance asset management company, China’s first wholly foreign-owned insurance asset management company, opened.
In 2019, Huatai Insurance Group became the first foreign insurance group in China through several equity transfers. According to recent public information, foreign capital “anda” continues to expand its investment in Huatai Insurance.
Foreign funded endowment insurance has also broken the problem. At the beginning of this year, HengAn standard Pension Company was approved to open. It is the first pension insurance company opened by a joint venture life insurance company in China and the ninth professional pension insurance institution in China.
When talking about the operation, reform and development of the banking and insurance industry in 2020 at a press conference held by the state information office earlier this year, Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission, mentioned that since 2018, foreign banks and insurance companies have been approved to set up nearly 100 institutions in China.
There are two main reasons for the upsurge of foreign insurance investment in China: first, the rapidly growing Chinese market has become a strategic highland that foreign institutions must occupy in the global layout; Second, China’s actively promoting financial opening-up policy has provided an opportunity for more foreign-funded institutions to enter the Chinese market.
In terms of policy, good news is still being released. Recently, the China Banking and Insurance Regulatory Commission issued the regulations on the management of insurance asset management companies (Exposure Draft), which clearly no longer limits the upper limit of the proportion of shares held by foreign insurance companies in insurance asset management companies, and sets the shareholder qualification conditions uniformly applicable to domestic and foreign shareholders, so as not to make differential treatment due to domestic and foreign differences.
With the continuous release of the policy dividend of expanding the opening up of the financial industry, the enthusiasm and vitality of foreign insurance companies in the layout of the Chinese market are constantly being stimulated.
(brokerage China)
