PICC Group Seeks to Improve Investments and Risk Management in 2012

The People's Insurance Company (Group) of China Ltd. said it is seeking investment synergy by further enhancing the use of capital while intensifying its compliance and risk prevention in 2012, according to the group's chairman and president, Yan Wu.

PICC Group, which is the parent of the largest Chinese nonlife insurer, PICC Property & Casualty, said it intends to increase its profitability and the effectiveness of its use of capital in the coming year, said Wu.

The insurance group plans to further develop its overall risk management system and improve operation effectiveness by further consolidating its resources and strengthening its network development, he noted.

PICC Property & Casualty recently increased its registered capital, which stands at 12.26 billion yuan (US$1.9 billion). Of that, domestic shareholders have a 69% stake and Hong Kong H-share holders have 31%, according to the China Insurance Regulatory Commission.

The regulator also approved PICC Health to increase its registered capital to more than 3.97 billion yuan.

In December, Hong Kong-listed PICC Property & Casualty said it planned to issue 5 billion yuan of new shares through the Hong Kong Stock Exchange to strengthen its capital base and solvency margin (Best's News Service, Dec 1, 2011).

American International Group Inc. holds 1.1. billion H shares of PICC Property & Casualty, representing about 31.92% of the Beijing-based insurer's issued H shares and 9.9% of total shares.

PICC Group is planning a dual-listing in Hong Kong and Shanghai. However, PICC Property & Casualty said the parent company does not have a concrete schedule as it still takes time to prepare for the listing, which won regulatory approval in 2009 (Best's News Service, Aug. 15, 2011).

In 2011, PICC Group realized total income of 290.74 billion yuan, up 9.8% year-on-year. Of the total, premium income accounted for 248.41 billion yuan, up 8.5% year-on-year. The group's total assets rose 32.7% to 585.6 billion yuan, and funds under its management reached 1.2 trillion yuan. During the year, PICC Group reported a record high in both its total profit and underwriting profit, said Wu.

Beijing-based PICC Group has 10 subsidiaries — PICC Property & Casualty, PICC Life, PICC Health, People's Insurance Company of China (Hong Kong), PICC Asset Management, PICC Investment Holding Co., PICC Capital Investment Management Co., Zhongsheng International Insurance Brokers Co., China Insurance Brokers Co. and Shanghai-based insurance broker PIBC.

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