Intends to leverage 24,000 branch network of Agricultural Bank to sell its products across China
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.