State Guarantee Fund Takes Majority Stake in China United Insurance

The China Insurance Guarantee Fund has become the largest shareholder of China United Insurance Holdings Co. with more than 861 million shares, or a 57.43% stake, following the restructuring of the Beijing-based insurer, according to the China Insurance Regulatory Commission.

China United has 1.5 billion shares outstanding for a total value of 1.5 billion yuan (US$235 million), said the CIRC.

Following the restructuring, the insurer has 20 shareholders. Xinjiang Hualian Investment is the second-largest shareholder of the insurer with more than 270 million shares, or 18.06%. Xinjiang Production and Construction Group'sInvestment Co. Ltd., a subsidiary of State Development and Investment Corp., a state-owned investment holding company, is the third-largest shareholder with 150 million shares, or 10%.

China United, formerly known as Xinjiang Production and Construction Corps Agriculture and Animal Insurance Co., was formed in July 1986. It was the second wholly state-owned insurer. It was renamed China United Insurance Holdings in 2006. The insurance holding company has a nonlife subsidiary, China United Property Insurance Co. Ltd.

At the end of 2010, China United had more than 26,000 staff and 2,063 operation units in 23 provinces and cities in China, generating premium income of 19.3 billion yuan, said the company.

China Insurance Guarantee Fund was jointly established by the CIRC, the Ministry of Finance and the country's central bank, People's Bank of China, in September 2008. It is responsible for insurance fundraising, management and operations; monitoring and evaluating risks of the insurance industry; participating in insurance risk management and operating businesses approved by the State Council, said the CIRC.

(By Rebecca Ng, Hong Kong news editor: Rebecca.Ng@ambest.com)