Anbang Insurance Group Co (安邦保險集團), whose chairman has been detained amid a police investigation, faces an added challenge as authorities asked banks to suspend business dealings with the insurer, a person with knowledge of the matter said.
The directive came as investigators began a wide-ranging probe into Anbang’s operations and detained chairman Wu Xiaohui (吳小暉), the person said, asking not to be named discussing private information.
Separately, at least six large Chinese banks have already stopped selling Anbang policies at their branch networks, people with knowledge of their operations said.
Anbang’s life-insurance unit sold 115 billion yuan (US$16.93 billion) of policies through banks last year, double the amount in 2015 and accounting for 88 percent of total premiums, according to its annual report.
At least two of the six banks had stopped selling Anbang policies before Wu’s detention, the people said.
An Anbang representative said the company’s direct-sales channels, mostly through mobile apps, are contributing an increasing share of premium income.
The person declined to comment on its relationships with banks.
Chinese investigators are looking into the sources of funding for the company’s overseas acquisitions, as well as “economic crimes,” people with knowledge of the matter said separately.
Starting with the purchase of the Waldorf Astoria hotel in New York City in 2014, Anbang went on a US$13.4 billion global acquisition spree that came to a virtual halt at the end of last year.
Premium income at Anbang’s life unit tumbled 88 percent in April, based on data posted yesterday on the China Insurance Regulatory Commission Web site.
Income from the Hexie health-insurance product plunged 94 percent, according to Bloomberg’s calculations based on the data.
Anbang on Wednesday held a meeting of senior executives at the group and its affiliates to discuss how to stabilize staff morale amid the crisis, one of the people said.
The person did not provide further details of what type of business dealings authorities asked banks to suspend with Anbang.
The life unit had 1.45 trillion yuan of assets by the end of last year, including 131 billion yuan of cash and cash equivalents, an annual report said, while its net income declined 19 percent from a year earlier to 15.2 billion yuan.
Anbang’s property and casualty unit held 795 billion yuan of assets, more than double the 2015 amount, a separate annual report said.
The unit’s net income rose by 48 percent to 12.4 billion yuan.
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