Hong Kong insurer FWD plans joint venture in Shanghai as China opens financial sector
The company, part of tycoon Richard Li Tzar Ka’s Pacific Century Group, could take 51 per cent in the venture, according to reports
FWD Group, the insurance business of Hong Kong tycoon Richard Li Tzar Ka’s Pacific Century Group, has applied to set up a joint venture in Shanghai, as it looks to take advantage of Beijing’s policy of opening up its tightly regulated financial industry.
FWD and its Chinese partners applied to the China Banking and Insurance Regulatory Commission on May 4 to set up a life insurance joint venture in Shanghai, the Shanghai Financial Service Office said on its website on Monday.
The office did not give further details of the partners or disclose the shareholder structure of the planned joint venture. The Shanghai Securities News reported that FWD would take 51 per cent of the venture, the maximum China would currently allow under the new policy, and that two unnamed partners would hold the remainder.
FWD did not give details of the venture’s structure, saying only that it sees “a significant opportunity in China to meet the financial and insurance needs of mainland customers.”
China has embarked on a major opening of its financial markets, including allowing foreign investors to take a maximum 51 per cent equity stake in brokerage firms, as concerns rise over protectionism and trade frictions.
FWD becomes the fourth overseas insurance company to push further into the China market in two weeks. On April 27, UK-based Willis, one of the world’s top three insurance brokers, gained regulatory approval to expand its client base from big companies to smaller ones and individuals, becoming the first foreign broker to get the go-ahead for broader market access.
Then on May 2, ICBC-AXA, a life insurance joint venture between Industrial and Commercial Bank of China and French insurer AXA, was given the nod to set up an insurance assets management company in Shanghai.
German insurance giant Allianz would set up a wholly owned holding company in Shanghai to oversee all its life and non-life business in mainland China, local financial authorities said last week. Allianz confirmed on Monday that it is “in talks with the Chinese authorities to advance its growth agenda in China.” It did not elaborate.
FWD was established in 2013 and is minority owned by reinsurance major Swiss Re. It also operates in Macau, Thailand, Indonesia, the Philippines, Singapore, Vietnam and Japan and has 2.7 million customers in Asia, according to its website.