Prudential plans to source its share of the capital increase from its free surplus of $8.3bn. Credit: Steve Buissinne from Pixabay.

International insurance company Prudential and China’s CITIC have approved a $351m capital increase for their Mainland China life insurance joint venture (JV), CITIC-Prudential Life Insurance Company Limited (CPL).

The capital increase, which will be equally contributed by PCHL, an indirect fully owned unit of Prudential, and CITIC in cash, awaits regulatory clearance.

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CPL is a 50/50 JV between CITIC and PCHL. The stakes of the companies in CPL will continue to be the same.

The registered capital of CPL will now grow to 4.86bn yuan ($682m) from 2.36bn yuan.

This move reflects the companies’ shared optimism in the Chinese life insurance sector’s long-term potential.

Prudential plans to source its share of the capital raise from its free surplus of $8.3bn, as reported on 30 June 2023.

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The company intends to use the surplus for further growth opportunities.

Prudential CEO Anil Wadhwani said: “As disclosed in our strategic update in August 2023, we are building a sustainable growth platform through targeted investment in structural growth markets.

“CPL plays a pivotal role in our overall strategy and growth, and we will continue to focus on delivering our customer-led and multichannel distribution strategy in the Chinese Mainland. This includes the development of whole life protection products and retirement solutions to address customers’ needs at different life stages, as well as further enhancing our professional high-quality agency force and expanding the bancassurance network.”

In September 2023, Prudential Financial and Warburg launched Pincus Prismic Life Reinsurance, a life and annuity reinsurance company.

The new Bermuda-based company secured a combined initial equity investment of $1bn from Prudential, Warburg and a group of investors.