People’s Insurance Company (Group) of China, the nation’s biggest property insurer, raised HK$24 billion (US$3.1 billion) in Hong Kong’s largest initial public offering in two years, two people with knowledge of the matter said. PICC Group sold about 6.9 billion shares at HK$3.48 apiece, near the bottom of a marketed range, said the people, asking not to be identified because the information is private. The IPO is the largest in Hong Kong since October 2010, when AIA Group raised US$20.5 billion, data compiled by Bloomberg show. The insurer defied a 78 per cent slump in the value of Hong Kong IPOs this year, thanks in part to US$1.82 billion of pre- negotiated investments with American International Group and 16 other so-called cornerstone investors, to complete the offering. Before the sale, companies had raised US$3.5 billion in Hong Kong IPOs this year, the lowest for similar periods since 2001, data compiled by Bloomberg show. An external spokeswoman for PICC Group declined to comment on the final price. Founded in October 1949, PICC Group offers property, casualty, life and health insurance products. It had about 130 million individual customers and 2.4 million institutional clients at the end of June, according to the prospectus. PICC Group is the biggest property insurer in China with 163 billion yuan in premium income for the first 10 months of this year, according to the website of China Insurance Regulatory Commission. The shares were originally marketed at HK$3.42 to HK$4.03 each, according to a prospectus for the offering, which accounts for about 16.7 per cent of the insurer’s enlarged share capital. Based on the per centage, the sale values PICC Group at US$18.6 billion. China’s Ministry of Finance, which held an 88.7 per cent stake in PICC Group before the IPO, will own 72.5 per cent after the sale, the prospectus shows. The offering values PICC Group at 19.1 times earnings of US$975 million for the 12 months through June 30, Bloomberg data show. That compares with 10.6 times for Hong Kong-traded PICC Property & Casualty, in which PICC Group has a 69 per cent stake, and 34.6 times for China Life Insurance, the data show. China International Capital Corporation, Credit Suisse, Goldman Sachs, and HSBC managed the share sale as joint sponsors, the prospectus shows. Cornerstone investments from companies including AIG, Tokio Marine and China State Grid accounted for about 59 per cent of the IPO, compared with an average of 26 per cent for eight other Hong Kong offerings worth at least US$1 billion in the last two years, data compiled by Bloomberg show. Cornerstone investors were allotted a guaranteed amount of stock in exchange for the promise that they won’t sell PICC shares within six months. China’s Social Security Fund acquired 11.3 per cent of PICC Group for 10 billion yuan (US$1.61 billion) in June last year, according to a statement on the fund’s website. That transaction valued the insurer at about 90 billion yuan. PICC Group demanded a premium to the 90 billion yuan valuation because the pension fund bought its shares at a discount, people with knowledge of the matter said November 12. The Social Security Fund’s stake in the company will fall to 10.9 per cent after the offering, PICC Group’s prospectus shows. China’s insurance market expanded at an average 19 per cent annual pace in the past decade to become the world’s sixth biggest, while insurers’ assets jumped 10 times, according to the industry regulator.