Wednesday, March 4, 2009

Email a Friend

All fields are compulsory

Your name:
Your email:

To include more than one recipient, please separate each email address with a semi-colon ';'

Recipient email(s):

Email yourself a copy?
Comments:

Add Your Comment

All fields are compulsory
All comments are subject to editorial review as we are subject to the same regulations adhered to in publishing our own content. For this reason, your comment may not be live immediately, or may not be published.

Your name:
Your email:
(will not appear)

You may email your comment to a friend
To include more than one recipient, please separate each email address with a semi-colon ';'

Recipient email(s):

Publish your name?
Email yourself a copy?

Comments:

I have read and agree to the Terms and Conditions

Why China Life chose not to bid for AIG Asia business

by Sudip Roy

AIG Asia business still has too many “uncertainties”, says China Life president.

The president of China Life, China's biggest insurance company, has told Euromoney it declined to bid for AIG's Asian life assurance business, the group's most prized asset, because of too much uncertainty surrounding the troubled US insurer.

China Life decided not to bid for American International Assurance after an in-house team of analysts concluded that it was too risky for the insurer to invest in AIA. "We have been following up with and making analysis on the sale of AIA assets. We think that AIG has changed quite a lot and there are still some uncertainties about AIG," says Wan Feng, president of China Life. "Acquiring part of AIG's assets doesn't work well with our development strategy. Therefore we have decided not to bid for AIA assets."

AIG had hoped to raise up to $20 billion to help repay its debts by selling AIA, which made a profit of $2 billion last year. The deadline for first round bids was last week. Three potential buyers stepped forward. They are believed to be the UK's Prudential, Canada's ManuLife Financial and Singapore state fund, Temasek. However, the sale has potentially collapsed after none of the bids matched AIG's valuation. Instead the state-backed firm is to give the US government a large stake in AIA.

Wan says that China Life will expand internationally in due course when appropriate opportunities arise but for the time being will concentrate on the domestic market, which he believes has great potential. "Hong Kong, Japan and Taiwan have insurance coverage of between 80% and 100%. In China, it's just 10%," he says. "China's insurance market has the greatest potential for growth in the world."

The company, which is 68% government-owned, has a market share of more than 40% of China's insurance industry. In the first half of 2008 it recorded a net profit of RMB15.8 billion, a fall of nearly 32% on the same period the previous year.

The full interview with Wan Feng will be published in Euromoney's April issue.

Also in April: The world’s best insurers – our annual client-based ranking of the best providers of insurance products and services

EuromoneyFXNews.com

Country risk survey monitoring political and economic stability of countries around the globe

Email a Friend