Beijing, China, November 4, 2003 – The
International Finance Corporation, the private sector arm of the World
Bank Group, has agreed to make an equity investment in China Life Reinsurance
Company to support its transformation into a more efficient provider of
services to Chinese customers. The transaction is part of IFC’s strategy
to emphasize support for key institutions that promote a better foundation
for the financial sector, which is necessary for sustainable private sector
development in China.
China Life Reinsurance Company is a spinoff of China Reinsurance (Group)
Company, or China Re, which is a 100 percent state-owned entity. The new
company will have multiple shareholders, both domestic and foreign, and
will be initially capitalized at RMB 800 million. The government’s stake
will be less than 50 percent.
“Life insurance is an important ingredient of support for the financial
sector in China. Reinsurance is essential to building capital markets and
for sound risk management among life insurance providers,” said Declan
J. Duff, director of IFC’s Global Financial Markets Department. Javed
Hamid, IFC director for East Asia and the Pacific, added, “IFC’s participation
in this investment is part of our ongoing effort to assist the Chinese
government in transforming state-owned companies and to reduce their reliance
on the state for capital to support their growth. The liberalization of
the reinsurance market by 2007 will create a fundamental change in the
insurance landscape. We are very pleased to be able to participate through
China Life Re in the new environment.”
“The establishment of China Life Reinsurance Company will open a new chapter
in China’s reinsurance history,” said Yao Hezhen, vice president
of China Reinsurance (Group) Company, “China Re has made a great contribution
to the development of the industry in China. In the post-WTO environment,
however, China will need companies to compete effectively. So we are pleased
to have quality domestic and foreign investors, such as IFC, as our shareholders
and partners to build and develop the new company.”
China Re is the sole specialized domestic reinsurance company in China.
It was incorporated on March 18, 1999, on the foundation of PICC Reinsurance,
a subsidiary of the former People’s Insurance Company of China.
China Re has been engaged mainly in mandatory and commercial reinsurance
business, including property reinsurance and life reinsurance and other
reinsurance business priced in RMB or foreign currencies. By the end the
of 2002, total assets of China Re were RMB21.0 billion, and total gross
premium written was RMB 19.2 billion.
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people's lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY03, IFC has committed more than $37
billion of its own funds and arranged $22 billion in syndications for 2,990
companies in 140 developing countries. IFC's worldwide committed portfolio
as of FY02 was $16.7 billion for its own account and $6.6 billion held
for participants in loan syndications.