The chairman of China's largest life insurer will soon head the country's biggest non-life insurer in a bid to boost its performance, an insider confirmed yesterday.
Yang Chao, chairman of China Life Insurance Co, will soon be appointed chairman of PICC Property & Casualty Co. And Wu Yan, president of China Life, will become the new chairman, a China Life source told China Daily.
But according to Wen Tao, head of China Life's public relations division, the appointments have not yet been officially announced.
Current PICC Chairman Tang Yunxiang will retire from the post.
"It is a government decision rather than market behavior through the board," said an insurance professor who declined to be named.
"The excessive involvement of the government is not good news for the capital market, especially for a company that just launched A shares in a period of rapid growth," he added.
The China Life source said the authorities made the appointments during a financial work conference that concluded over the weekend, hoping to boost PICC's performance with Yang Chao's broad experience and capabilities.
As China's top non-life insurer and one of the few State firms listed overseas, PICC posted 1.11 billion yuan in net profit in the first half of 2006, up 25 percent from a year ago, but below market expectations.
Yang Chao replaced Wang Xianzhang as the chairman of China Life in May 2005. Before that, he was the chairman of China Insurance International Holdings Company Ltd.
Yang is considered skilled at turning around flat performers.
China Life shares dipped 0.3 percent to 43.9 yuan yesterday after experiencing a slump of 6.04 percent on Tuesday.
"The drop of China Life shares has something to do with change in its top management," said Hao Yansu, an insurance professor at the Central University of Finance and Economics.
But one securities analyst said: "The drop of China Life shares is a normal adjustment after the shares saw a rapid increase recently."
China Life, which was listed on the Shanghai bourse on January 9 and raised US$3.6 billion in its initial public offering, became an index component on Tuesday and currently has a roughly 10 percent weighting, making it the second-largest stock in terms of its market value.
It climbed 5.14 percent on Monday and has grown over 18 percent since its debut early this month.
(China Daily January 25, 2007)