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Several insurers are preparing for the first floatation of a Chinese insurance company on the stock market.
Last week, the property insurer, Shanghai-based Dazhong Insurance Co Ltd, issued a public notice in the Shanghai media to say that it has completed half of the probationary period and expects to become the first ever listed insurer in China.
"I believe everyone preparing for that hopes to be the first one on the stock market, which can help upgrade the company's image and attract investors' attention,'' Chen Yanping, the head of Dazhong Insurance's marketing department said.
Besides Dazhong, Shanghai-based China Pacific Insurance, Shenzhen-based Ping'an Insurance, Beijing-based New China Life Insurance and Taikang Insurance have all sought floatation on the stock markets.
The two biggest Chinese insurers, China Pacific and Ping'an, were reported to have almost completed their one-year probationary period.
However, both companies are busy with tasks to divide their life and property insurance businesses. "Therefore, we need to do that public notice only when we have completed all those preparation tasks,'' said Shi Jierong, the deputy general manager of the China Pacific headquarter. China Pacific plans to float the group company which consists of both property and life insurance, while Ping'an is to float its part of businesses on overseas stock markets.
"The Chinese insurance industry is facing great challenges from the international market. Therefore, every one of us is trying to float as soon as possible,'' Shi said. "This will not only increase individual insurer's competitiveness and help boost the insurance industry in China as a whole, but also will be beneficial for the healthy development of the stock market in China.'' With such considerations in mind, Shi believed it was therefore not a big issue as to which one will be the first one to list.
Financial analysts were reported to have high opinions about the insurance shares coming soon in China.
Bloomberg quoted Joe Zhang, head of China Research of UBS Warburg in Hong Kong, as saying that investors are likely to go for insurance companies, which are the next big thing after telecommunications.
So far, China's insurance market has entered a rapid-growth period, with the premium income in the first half of 2001 amounting to 102.2 billion yuan (US$12 billion) and projected to double over the next five years to 290 billion yuan (US$35 billion).
(Chinadaily.com.cn 07/30/2001)
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