Recently, China Post Insurance a life insurance company controlled by China Post increased its capital and shares, and introduced foreign-funded insurance enterprise AIA as a strategic investor , which aroused widespread concern in the market.
On January 12, 2022, the cbcirc issued a reply on the change of registered capital and shareholders of China post insurance, saying that approved the increase of registered capital of China post insurance from 21.5 billion yuan to 28.663 billion yuan, which was subscribed by AIA. The dust of this sensational “marriage” between China and foreign countries has settled.
It is generally believed in the industry that China Post Insurance bancassurance channel has obvious advantages, while AIA individual insurance channel has outstanding performance. The combination of the two sides can form complementary advantages. At the same time, it also reflects the trend of further opening up of the insurance industry to the outside world and continuous overweight of foreign capital in the Chinese market .
maximum items
It is understood that the amount of capital introduced in this transaction reached 12.033 billion yuan , which is the largest capital and share increase project in China’s insurance industry so far .
According to public data, China post insurance is a life insurance company controlled by China Post. It is headquartered in Beijing and officially opened in September 2009. Before the capital increase, the registered capital was 21.5 billion yuan.
In April 2021, China post insurance issued a capital increase announcement at Shanghai United Property Rights Trading Center, saying that it plans to introduce a new shareholder, with a new registered capital of 7.16 billion yuan and a corresponding shareholding ratio of 24.99%. The total amount of fund-raising and the price of capital increase are to be determined.
In June 2021, China Post Insurance announced that it plans to introduce AIA as a strategic investor to increase capital and shares. AIA plans to invest about 12.033 billion yuan, of which 7.163 billion yuan is included in the registered capital and 4.837 billion yuan is included in the capital reserve .
After the capital increase, AIA has become the second largest shareholder of China post insurance. The specific equity structure is as follows:
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China Post Group Co., Ltd. holds 38.20%
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AIA holds 24.99%
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Beijing Zhongyou Asset Management Co., Ltd. holds 15.00%
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China Philatelic Co., Ltd. holds 12.19%
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Postal scientific research and Planning Institute Co., Ltd. holds 9.62%
Meanwhile, the registered capital of China post insurance increased to 28.663 billion yuan, surpassing China Life Insurance Company Limited(601628) with a registered capital of 28.265 billion yuan, second only to Ping An Life Insurance and everyone life insurance, became the third life insurance company with registered capital .
complementary advantages
Why did China Post Insurance “marry” with foreign AIA in this capital increase?
Zhu Junsheng, research director of China Insurance and Pension Research Center, Wudaokou School of finance, Tsinghua University, said that the transaction is mutually beneficial to both sides because their resource advantages are highly complementary .
For China post insurance, on the one hand, the participation of foreign shareholders with a high degree of internationalization can help them improve corporate governance ; On the other hand, China post insurance has always been dominated by bancassurance channels, and the value of the company’s new business is low. AIA has obvious advantages in personal insurance channels. The combination of the two sides can help China Post Insurance broaden sales channels and promote value transformation .
For AIA, after becoming the second largest shareholder of China post insurance, China post insurance may rely on China Post’s outlets and Postal Savings Bank Of China Co.Ltd(601658) to carry out insurance sales all over the country, so as to expand China’s insurance market.
It is understood that since its establishment in 2009, China post insurance has fully relied on postal networks and resources, covering 22 provinces (districts and cities), 296 prefectures and cities, 1690 counties and cities and 32571 outlets, and more than 70% of its business and services are in and below counties.
AIA has announced that its investment in China post insurance will benefit from the opportunities of expanding China’s life insurance market and the potential brought by distribution channels and customer base complementary to its current China strategy.
The company also said that in the future, it will provide professional support for China Post Insurance in product development, technology, investment, risk management, expanding and deepening the unique distribution potential of China post insurance.
“In the future, the two sides may also have some differences in business philosophy, corporate culture and understanding of the law of life insurance development, which requires a running in process.” Zhu Junsheng thinks.
keep open
China Post Insurance said that joining hands with AIA is a key measure for China post insurance to serve the national strategy and implement the three-year action of state-owned enterprise reform. It is an important achievement in implementing the national financial opening-up policy and promoting the reform of mixed ownership of state-owned enterprises. It is also a practice to promote the formation of a higher-level opening-up pattern in the insurance market.
It is noteworthy that in recent years, China’s insurance industry has actively pursued the policy of opening to the outside world, investment opportunities in the insurance market have attracted much attention from China’s foreign capital markets .
Taking AIA as an example, a series of favorable policies launched by the regulatory authorities have accelerated its layout in the Chinese market.
In August 2020, AIA completed the “sub reform” and added two new business areas in Sichuan and Hubei in 2021.
This strategic investment in China post insurance will form a situation of “one participation and one control” in its business in China, which is conducive to its further development of the Chinese market.
Wang Guojun, assistant dean of the school of insurance of the University of international business and economics, believes that the characteristic of this way for Chinese insurance enterprises to introduce strategic investment from foreign insurance enterprises is to seek complementary advantages and form a joint force. It is also the result of the further opening up of the insurance industry to the outside world, which means that foreign investors continue to be optimistic about China’s insurance market.
Zhu Junsheng also believes that behind the approval of China post insurance’s capital increase and AIA, it is a positive signal released by China’s insurance industry’s opening-up policy, and foreign insurance enterprises have made some positive responses. Globally, they still believe that China, an emerging insurance market, has great potential, which will also bring more confidence to China’s insurance industry.
