NEW CHINA Life Insurance, the country’s third-largest life assurer by premium income, has raised $1.9 billion from an initial public offering in Shanghai and Hong Kong.
The move is the first of a wave of likely listings intended to revive the flagging growth of the Chinese insurance sector.
The shares were priced near the bottom of the state-backed group’s target range but its success in pushing through the listing despite rough market conditions will instil confidence for several other Chinese insurers waiting to go public.
The Chinese insurance market has boomed over the past decade, with total premiums growing nearly 30 per cent a year on average since 2000.
But there has been a sharp reversal this year as a slowdown in policy sales has led to a decline in premium revenues.
Weak stock markets have hit China’s insurers, undermining their investment income and “leading to heightened solvency pressure”, according to a report published this week by Fitch, the credit rating agency.
Listings are being seen as an increasingly important source of cash to bolster insurers’ balance sheets and propel their expansion.
New China Life – 15 per cent owned by Swiss insurer Zurich Financial – raised about $1.3 billion in Hong Kong and $580 million in Shanghai, two people familiar with the deal said.
The Hong Kong offering was priced at $28.50 a share, at the low end of the target range of HK$28.20-HK$34.33. – (Copyright The Financial Times Limited)
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