AIA Group Forms New Board Ahead of Hong Kong IPO

AIA Group, the Asian life insurance operations of American International Group Inc., has formed a new board of directors prior to its planned initial public offering in Hong Kong. The board is led by Mark Tucker, executive chairman and chief executive officer of AIA Group. It is comprised of a former Hong Kong government chief, the head of Hong Kong's public railways system and a former China state-owned banking and commercial group chairman.

The board changes give a "new outlook of AIA" to the market after the failed acquisition of AIA by U.K.-based Prudential plc. But the board change may not have significant impact on AIA's Hong Kong IPO, said Eugene Law, director of Hong Kong-based securities firm CASH Financial Services Group.

Earlier reports said AIG has planned to sell a 30% to 50% stake of AIA for the latter's IPO and reduce its fundraising target from US$35 billion-US$37 billion to US$30 billion-US$32 billion. Law said the adjusted range of the size of the fundraising is "OK" and close to AIA's embedded value.

He also said a successful listing of AIA will be "more favorable" to Hong Kong-listed Chinese insurers than domestic Hong Kong-listed insurers, as investors are now expecting "more positive" business prospects in China.

AIA Group said in a near-final draft prospectus filed with the Hong Kong stock exchange that the group's principal strategies are to "maximize opportunities in China and India; continue to grow its tied agency distribution strength; expand and broaden its multichannel distribution platform; maximize cross-selling opportunities by leveraging its broad customer base and diverse product offerings to build its financial services platform; increase the proportion of high margin products; and drive operational efficiencies to further streamline its business and reduce costs."

On the new board, AIA said there are three independent nonexecutive directors, namely Chung-Kong Chow, Rafael Si-Yan Hui and Qin Xiao; as well as four nonexecutive directors, Edmund Sze Wing Tse, Jack Chak-Kwong So, Jeffrey Joy Hurd and Jay Steven Wintrob. Hurd and Wintrob were appointed to represent AIG on the board.

Most of the new board members were appointed on Sept. 28, according to AIA.

Tucker, 52, was the former CEO of the U.K.'s Prudential plc prior to taking up his new position at AIA in July (BestWire, July 19, 2010).

Tucker said with AIA's strong management teams across the region, the insurer will rely on its competitive advantages to "fully capture the profitable growth opportunities ahead, and become the pre-eminent life insurance provider in the Asia-Pacific region."

Hui was formerly chief secretary for administration of the government of Hong Kong SAR and managing director of the Mandatory Provident Fund Schemes Authority.

Chow is the CEO of Hong Kong-listed public railways system MTR Corp. Ltd. and deputy chairman of the Hong Kong General Chamber of Commerce and a director of Anglo American plc.

Qin was chairman of the state-owned enterprise China Merchants Group Ltd. and chairman of China Merchants Bank Co. Ltd. He is also an independent nonexecutive director of real estate developer HKR International Ltd. and China Telecom Corporation Ltd. He has been a member of the Eleventh Session of the Chinese People's Political Consultative Conference since 2008, said AIA.

Tse is chairman of Philamlife, AIG's life insurance operation in the Philippines, and chairman of Nan Shan Insurance Co., AIG's life subsidiary in Taiwan. He is also a nonexecutive director of China's largest nonlife insurer, PICC Property and Casualty Co. Ltd. Tse was appointed as nonexecutive director of AIA Group on Sept. 27, 2010 and as the group's honorary chairman in October.

So served as independent nonexecutive director of American International Assurance Co. from 2007 to 2010 and became the nonexecutive vice chairman of Credit-Suisse (Greater China) in January 2008.

Hurd is senior vice president of AIG's human resources and communications.

Wintrob, served as AIG's executive vice president of retirement services since 2002 and was appointed AIG's executive vice president of domestic life and retirement services in 2010. He was named president and CEO of SunAmerica Financial Group, AIG's life and retirement services businesses based in the United States, as well as two life insurance operations in Japan, in 2009.

AIA Group plans to have its IPO in Hong Kong by the end of this year to help its parent pay back part of a bailout owned to the U.S. government after U.K.-based Prudential plc failed to acquire the company in June with an offering price of US$35.5 billion (BestWire, June 7, 2010).

(By Rebecca Ng, Hong Kong news editor: [email protected])