CITIC-Prudential Life to Move from Guangzhou to Beijing

CITIC-Prudential life insurance Company Ltd. has decided to move the head office from Guangzhou to Beijing.

As a joint venture life insurance firm, CITIC-Prudential Life has CITIC Group as the majority shareholder, who has abundant customer resources in Beijing. Therefore, the removal of the head office is expected to further drive the business development of the Sino-foreign life insurer.

Another reason is that the southern boomtown Guangzhou seems not to provide adequate support for the financial industry. Instead, the capital city of the coastal province Guangdong has the real estate sector and the auto-making as the pillar industries of local economy.

Backed by the provincial government, a locally incorporated life insurance company, a property and casualty insurance company and a pension insurance company are expected to debut in Guangzhou this year, according to Guangdong Branch of China Insurance Regulatory Commission.

Guangdong Finance and Investment (Holding) Corp., the local government-backed financial conglomerate, is to stakes in the upcoming life insurance company, property insurance company and pension insurance company separately.

Ever since the entry of these foreign insurance companies into China, they have not progressed fast under the competition with Chinese players. Currently, the Chinese parents take the controlling rights in nine Sin-foreign life insurance companies.

As New York Life Insurance Company has withdrawn from Haier New York Life Insurance Co., the joint venture has changed its name into Haier Life Insurance Company Limited. The U.S. insurer has already transferred a 25% stake of Haier New York Life to Qingdao Haier Investment and Development Co. and another 25% stake to Meiji Yasuda Life Insurance.

In this way, Haier gets a 70.76% stake in the new insurance joint venture and the Japanese side has a 29.24% stake. According to media, both the Chinese and foreign parents are going to jointly invest CNY 345 million to the Shanghai-based venture, thus help it raise the registered capital up to CNY 1.18 billion.

Haier New York Life started operation in 2002. During the eight years of operation, the company did not perform well. According to the regulatory department China Insurance Regulatory Commission (CIRC), Haier New York Life was the No.21 among a total of 28 joint venture life insurers in China’s Mainland. New York Life Insurance explained that it made the decision after careful evaluation. After the move, the U.S. insurance company vows to focus on other markets.

(USD 1 = CNY 6.58)