China Life Insurance Co, the nation’s biggest insurer, is in talks with American International Group Inc over buying the US insurer’s Asian unit, the insurance regulator said.
China Insurance Regulatory Commission Vice Chairman Li Kemu said AIG visited China looking for interest to buy its Asian subsidiary, American International Assurance Co China Life is in talks over a possible bid for the company, he said.
“This is still under discussion,” he said after a briefing in Beijing today. “We feel AIA is a very good company. At least, its China and Hong Kong operations are not bad.”
AIG, the New York-based insurer forced to sell businesses to repay an $85 billion government loan, said October 3 it would seek buyers for its life insurance and retirement operations in the US, Europe, Latin America and Japan. Chinese regulators are prompting insurers to increase investments to help boost the nation’s economy after six straight quarters of slowing growth.
Cao Qingyang, a Beijing-based spokesman of China Life, was not available to comment when reached on his cell phone. Bonnie Wu, a spokeswoman for AIA in Hong Kong, declined to comment.
China has told the nation’s insurers to be prudent in their overseas investments, Li Kemu said.
Overseas-incorporated Chinese insurers have suffered some paper losses after buying foreign bonds and derivatives, he said on Thursday withKout being specific.
“The negative impact of the global financial crisis on China is gradually emerging,” Li said. His commission will work to prevent any “abnormal” increase in policy redemptions.
Commercial property
The CIRC is also studying a plan to allow insurers to invest in commercial property, Li said without elaborating.
The regulator plans to allow insurers to buy more types of corporate bonds to spur economic growth and development of the capital markets, Yuan Li, an assistant chairman of the CIRC said today at the same briefing.
The State Council, or Cabinet, has approved a plan to let insurers invest in unlisted companies, including infrastructure projects. The regulator is drafting implementation rules and will pick insurers for a pilot programme.
AIG, once the world’s largest insurer, operates in more than 100 countries and sells life, health and accident protection to individuals and businesses.
