BEIJING, Dec 07, 2007 (SinoCast China Financial Watch via COMTEX) -- LFC | charts | news | PowerRating -- China Life Insurance Company Limited (China Life and SHSE: 601628 and SEHK: 2628), the country's biggest life insurer, will be likely to buy into a Japanese counterpart or an asset management firm, according to the Japanese media.
Yang Chao, board chairman of China Life, disclosed in an interview that he had met executives of several Japanese insurance and asset management firms and talked with local financial institutions over the possible equity acquisition. However, the board chairman did not mention names of the specific targets, acquisition timetable or clauses.
Notably, the life insurer has had talks with several European and US insurers and asset management companies. Prudential Plc and Aviva Plc are two of the guessed companies, according to a report.
In addition, Axa and ING Group, which are now expanding business in Asia, are also China Life's possible acquisition targets.
Ping An Insurance (Group) Company of China, Ltd. (Ping An, SHSE: 601318 and SEHK: 2318) recently gained the regulatory approval to use up to 15% of its assets for investments in Hong Kong and other important equity investments.
Generally, local insurers' such investments can only account for not more than 5% of their total assets. Ping An, China's second biggest insurer by market share, is the first one to win the highest quota.
Its assets had totaled CNY 624 billion by September 30, 2007. Thus, more than CNY 100 billion can be used for such investments in 2008.
The insurer was just permitted to buy a 4.2 percent stake in Dutch-Belgian financial services firm Fortis for EUR 1.81 billion.
China Life reaped net profit of CNY 24.7 billion in the nine months ended September 30, 2007.
Earnings per share were 0.87, showed the Beijing insurer's third-quarter financial results dated October 30.
Investment revenue surged sharply in the period. Investment assets stood at CNY 878.8 billion as of September 30, 2007 and return rate on investment hit 8.63%. Meanwhile, the life insurer saw a growth in the core business. Receivable premiums reached CNY 7.8 billion as at the end of this September, versus CNY 5.73 billion at last yearend.
As of September 30, 2007, assets of China Life totaled CNY 925.2 billion and capital stock consisted of 28.26 billion shares. In terms of market cap, it has become the biggest listed insurer globally. Also, its sellable financial assets were as many as CNY 381.9 billion, surging 59.49% over the end of last year.
