AIG is exploring a potential joint venture (JV) with PICC Group and PICC Life to distribute life insurance and other insurance products in the Chinese market.
The insurance products would be distributed through a specialised agency force on a nationwide basis with a focus on major cities in China, and engage in reinsurance and other related business cooperation, said AIG.
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AIG is also investing approximately $500m in the Hong Kong listing of PICC Group and said it has signed a non-binding proposal to regarding the proposed joint venture.
However, if definitive legal documentation for the proposed joint venture has not been executed by 31 May 2013, AIG can sell its stake in PICC Group.
AIG currently owns approximately 9.9 percent of PICC Property and Casualty Company Limited, a subsidiary of the PICC Group with publicly listed shares in Hong Kong.
According to a report Life Insurance in China, Key Trends and Opportunities to 2016, which is available at the Insurance Intelligence Center (IIC), PICC Life’s market share of the Chinese life insurance market – in terms of gross written premiums – has increased from 0.9% in 2007 to 7.4% in 2011.
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By GlobalDataThe IIC report notes this compares with China Life’s 33.3% share of the Chinese life insurance market in 2011, in terms of gross written premium.
