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IFC Participation in First Foreign Direct Investment In a Chinese National Life Insurance Company


In Washington:          
L. Joseph                      

Phone: (202) 473-7700          

Fax: (202) 974-4384          
E-mail: ljoseph@ifc.org  


In Hong Kong:

Vipul Bhagat

Phone: (852) 2509-8100

Fax: (852) 2509-9363

E-mail: vbhagat@ifc.org


Washington, DC, January 5, 2001 – The International Finance Corporation will invest in China’s first private insurance company, New China Life Insurance Co. (NCL), participating in a capital increase for the company alongside Zurich Financial Services Group of Switzerland, Meiji Life Insurance Company of Japan, and the Netherlands Development Finance Company (FMO).

IFC will make an initial investment of US$23.5 million for a minority position in NCL, the only private-sector led insurance company in China, which opened operations in Beijing in 1996.  NCL, which has a license to operate throughout China, currently has branches in Beijing, Chengdu, Nanjing and Tianjin, and has regulatory approval for six more branches in the major markets of Shanghai, Guangzhou, Wuhan, Jinan, Hangzhou and Harbin.


In 1999, NCL’s gross written premium was RMB 1.06 billion (approximately $120 million).  It employs about 500 people and has more than 2500 agents. After the foreign investment, NCL’s paid-up capital will rise to about RMB1.2 billion (approximately $145 million) with the new shareholders comprising 24.9% of the equity of NCL.  The capital increase will help finance the expansion into other regional markets.  The collaboration with foreign technical partners will give NCL access to international management know-how and technology in order to position itself for increased competition after China’s anticipated accession to World Trade Organization.


In connection with this investment, IFC has also provided technical assistance funded by the Government of Switzerland for NCL to build an advanced master information and planning system.


Mr. Javed Hamid, IFC Director for East Asia and the Pacific, said the transaction marks the beginning of a new era for China’s insurance industry, which is becoming increasingly dynamic and competitive as the role of the domestic private sector and international insurers increases.


The mission of IFC, part of the World Bank Group, is to promote private sector investment in
developing countries, which will reduce poverty and improve people's lives.  IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.