FWD Group, the insurance business of Hong Kong tycoon Richard Li Tzar Ka’s Pacific Century Group, has applied to set up a joint venture in Shanghai, according to local reports and the Shanghai Financial Service Office website.
FWD and its Chinese partners applied to the China Banking and Insurance Regulatory Commission to set up a life insurance joint venture in Shanghai, the Shanghai Financial Service Office said on its website yesterday.
The office did not give further details of the partners or disclose the shareholder structure of the planned joint venture, but according to reports in The Shanghai Securities News and the South China Morning Post, it is reported that FWD would take 51% of the venture, the maximum China would currently allow under the new policy introduced by the Chinese government recently. Two unnamed partners would hold the remainder.
FWD did not give details of the venture’s structure, saying only that it sees “a significant opportunity in China to meet the financial and insurance needs of mainland customers”, according to the SCMP report.
China has recently allowed the opening of its financial markets like never before, including allowing foreign investors to take a maximum 51% equity stake in brokerage firms, for the first time to counter concerns rise over protectionism and trade frictions.
FWD is the fourth overseas insurance company in the last two weeks looking to further expand in the region. On April 27, UK-based Willis gained regulatory approval to expand its client base from big companies to smaller ones and individuals, becoming the first foreign broker to get the go-ahead for broader market access.
On May 2, ICBC-AXA, a life insurance joint venture between Industrial and Commercial Bank of China and French insurer AXA, was given the nod to set up an insurance assets management company in Shanghai.
And German insurance giant Allianz said that it would set up a wholly owned holding company in Shanghai to oversee all its life and non-life business in mainland China, local financial authorities said last week. Allianz confirmed on Monday that it is “in talks with the Chinese authorities to advance its growth agenda in China”, according the SCMP report.
FWD was established in 2013 and is minority owned by reinsurer Swiss Re. It also operates in Macau, Thailand, Indonesia, the Philippines, Singapore, Vietnam and Japan and has 2.7m customers in Asia, according to its own statistics.