Taikang Life looks for dual listings

Taikang Life's Nanjing branch in this file photo taken in 2003. [Photo / Asianewsphoto]

Price could approach record high of 100 yuan for insurance sector

BEIJING - Taikang Life Insurance Co Ltd, the country's fifth-largest life insurer, plans to have a dual listing in Hong Kong and Shanghai within three years, Chairman Chen Dongsheng said on Monday.

"Besides the dual listing plan, the annual growth rate of new policies will be no less than 30 percent in the next three years," he said, with the value of new policies exceeding 8 billion yuan ($1.25 billion) a year.

According to Chen, Taikang's premium income will hit 90 billion yuan by the end of the year. He said that the company's market share stands at 8.2 percent.

As of June 30, net assets exceeded 14 billion yuan, and its solvency ratio was 173 percent.

In April, the China Insurance Regulatory Commission approved Goldman Sachs Group's purchase of a 12.02 percent stake, or 102 million shares, in Taikang Life.

"The two companies will strengthen cooperation in corporate governance, risk management, investment management and product development," a statement by Taikang said.

The transaction will make Goldman Sachs the second-largest shareholder in Taikang, though financial details of the deal were not disclosed. Industry insiders said that Goldman Sachs' cost might be as high as 60 yuan a share.

Analysts said the move will pave the way for Taikang's imminent listing. Based on the company's balanced business structure, industry analysts said that the Taikang's IPO might be priced at nearly 100 yuan a share, a record high for the industry.

The announcement of Taikang's dual listing plan followed a similar move by New China Life Insurance Co Ltd (NCL), the country's third-largest life insurer.

NCL has filed documents with the stock exchange in Hong Kong for a planned IPO of up to $4 billion in Hong Kong and Shanghai, Reuters reported, citing unidentified sources with direct knowledge of the plans.

The company, in which Swiss insurer Zurich Financial Services AG has a 15 percent stake, aims for a hearing with the Hong Kong exchange's listing committee on Sept 22, with the IPO set for sometime in October, sources said.

Both established in 1996, NCL is the major rival of Taikang.

"Taikang will also diversify its business by strengthening its health insurance, pension business and aging-society business," said Chen.

"We aim to increase total assets from the current 330 billion yuan to 1 trillion yuan within five years, with annual premiums of 200 billion yuan, net assets hitting 50 billion yuan and profit after tax reaching 10 billion yuan by 2016," he added.