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Enoch Yiu

HSBC Holdings has obtained approval from the China Insurance Regulatory Commission to set up a 50-50 joint-venture life insurance company with Beijing-based National Trust.
HSBC Life Insurance will have a registered capital of 500 million yuan (HK$567 million) when it is established in the third quarter of the year.
National Trust is a privately held trust company authorised by the China Banking Regulatory Commission to offer asset management, investment banking, wealth management and direct investment services on the mainland.
'This investment will allow us to further broaden our insurance offering in China, where the growing personal wealth base will drive the use of insurance products,' said David Fried, the chairman and chief executive,  Asia-Pacific, of HSBC Insurance.
Mr Fried will be the chairman of the joint venture, and National Trust chairman Dennis Chan its deputy chairman. 
Terry Lo Kin-wing will be the chief executive.
The joint venture has a national licence but  will need approval from each province before selling policies in a particular area. 
Mr Fried (left) said the  company would first focus on selling life insurance, pension and retirement products in Shanghai. It  would then expand to other parts of the country, including Guangdong and Beijing.
'We will mainly sell through the branch network of HSBC, Hang Seng Bank and Bank of Communications on the mainland,' Mr Fried said, adding that the venture would also hire agents to sell policies.
Hang Seng is a subsidiary of HSBC, which also owns 18.6 per cent of Bocom. HSBC also owns 16.8 per cent of Ping An Insurance (Group), the  country's second-largest life insurer, but Mr Fried said the joint venture would not compete with Ping An.
Insurance premiums in China represent only 3.3 per cent of gross domestic product, compared with 18 per cent in Britain.
Mr Chan said: 'In business vision, management philosophy and corporate governance, we share the same goals and diligence as our partner HSBC.'
Mr Chan said these synergies and HSBC's track record would provide good foundations for the joint venture to grow.
HSBC is the first insurer to receive approval to form an insurance joint venture under the closer economic partnership arrangement between Hong Kong and the mainland.



HSBC to set up life insurance venture with National Trust