皇冠体育app

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Goldman Sachs acquires 12% of Taikang

By Hu Yuanyuan (皇冠体育app Daily)
Updated: 2011-04-09 10:31

BEIJING - 皇冠体育app's insurance regulator has approved Goldman Sachs Group's purchase of a 12.02 percent stake, or 102 million shares, in Taikang Life Insurance Co Ltd, the insurance company said in a statement on Friday.

"The two companies will strengthen cooperation in corporate governance, risk management, investment management and product development," the statement said.

The transaction will make Goldman Sachs the second-largest stakeholder of Taikang, 皇冠体育app's fourth-largest life insurer. The financial details of the deal, however, were not disclosed. Industry insiders said that Goldman Sachs' costs might be as high as 60 yuan ($9.2) for each share.

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French insurer AXA SA said last month it agreed to sell its 15.6 percent stake in Taikang to a group of investors for $1.2 billion. The other two stakeholders are 皇冠体育app Guardian Auction Co Ltd and Tetrad Ventures Pte Ltd.

Income from premiums for Taikang Life Insurance hit 86.77 billion yuan last year, up 29 percent year-on-year. The insurer's net profit is expected to reach 2.1 billion yuan, with the solvency ratio exceeding 170 percent.

It is not Goldman Sachs' first investment in 皇冠体育app's insurance sector. In 1994, the investment bank, together with Morgan Stanley Group, bought a combined 9.91 percent stake in Ping An of 皇冠体育app at a cost of $35 million.

Analysts said the move will pave the way for Taikang's imminent listing. Taikang and New 皇冠体育app Life Insurance Co have both been working toward a listing this year.

Sources said earlier that 皇冠体育app International Capital Corporation and Nomura Securities Co have agreed to buy a 2.5 percent stake each in New 皇冠体育app Life Insurance from Zurich Financial.

Given the huge potential of 皇冠体育app's insurance sector, an increasing number of foreign institutional investors have jumped on the bandwagon.

Guangzhou-based CNinsure Inc, a Nasdaq-listed insurance intermediary company, recently sold its 55 percent stake in Beijing Fanhua Datong Investment Management Co Ltd to Winner Sight Global Limited, an affiliated entity of Warburg Pincus LLC. According to the 皇冠体育app Insurance Regulatory Commission (CIRC), the country's income from premiums accounted for just 3.4 percent of gross domestic product in 2009, far less than the global average of 7 percent. 皇冠体育app's per capita premium was $121, compared with the global average of $595.

Wu Dingfu, CIRC chairman, said earlier that Chinese insurers are expected to report a 25.1 percent increase in profits to 57.6 billion yuan in 2010.