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.