China Life Insurance Co (中國人壽), the nation’s fourth-largest by market share, expects its investment in Jian Xin Life Insurance Co (建信人壽) to pay off soon, as its partner aims to be the largest bancassurance provider in China in five years, the local insurer said yesterday.
China Life, which owns a 19.9 percent stake in its Chinese peer, said it was optimistic in view of Jian Xin’s fast-growing premiums, which rose almost sevenfold in the first quarter to 1.46 billion yuan (US$229.6 million) compared with a year ago, company data showed.
“The figure is also higher than gross premiums of 1.28 billion yuan for the whole of last year,” China Life chairman Alan Wang (王銘陽) told an investor conference in Taipei.
Jian Xin Life, a subsidiary of China Construction Bank Corp (中國建設銀行), ranks 20th by premiums in China. It plans to add five new branches this year to its existing operations in Shanghai, Jiangsu, Guangdong, Beijing and Shandong, Wang said.
By the end of 2015, Jian Xin aims to own 28 branches across China and become the country’s largest insurer in 10 years, aided by the parent firm’s 300 million customers, he said.
The Taiwanese partner is responsible for providing know-how in the course of the expansion, Wang said.
“The goal is achievable following the appointment of Wang Hongzhang (王洪章) as Jian Xin chairman in January and the upgrading of the partnership from a cooperation into a strategic alliance on consumer banking,” Alan Wang said.
Furthermore, Jian Xin plans to list in four years, he said.
Jian Xin aims to boost premiums this year by issuing co-branded credit cards with China Construction Bank and extending its sales channels to telemarketing and sales agents, he said.
It is also expanding its product lines to meet demand for wealth management, annuity and protection policies, Alan Wang said.
Meanwhile, China Life aims to strengthen protection insurance policies to cut the cost of liabilities, while promoting unit-linked products to boost fee income, he said.
The European debt crisis took a toll on the company’s profitability, with net income in the first quarter falling 54 percent year-on-year to NT$1.01 billion, or earnings per share of NT$0.46, a company report said.
The insurer had an embedded value of NT$79.6 billion, or NT$36.18 per share, as of December last year, up 12 percent from NT$71.1 billion a year earlier, the report said.
The figures indicate that the company’s share price is undervalued, Alan Wang said.
China Life closed down 1.85 percent at NT$26.50 yesterday, weaker than the TAIEX’s 1.1 percent fall, Taiwan Stock Exchange statistics showed.
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