PICC, the country's largest non-life insurer, is preparing to list in Shanghai this year, the company's top management said yesterday.

 

"We've just set up a special team to promote the IPO of A shares," said Zhou Shurui, vice-president of the People's Insurance Co (Group) of China. "But we haven't decided whether the group will go public as an entity or if it will just be Hong Kong-listed PICC Property and Casualty Co Ltd returning to the mainland market."

 

The share sale's timing depends on the market and other factors, said Zhou.

 

"We expect the country's stock market to reach its peak around the Olympic Games, but PICC won't be prepared to list then," said Wang Xiaogang, an analyst at Shanghai-based Orient Securities.

 

The country's largest insurers - China Life, Ping An and China Pacific Insurance - have all floated on the Shanghai exchange in the past two years.

 

As PICC prepares to list at home, it's also speeding up its equity investment. The group set up an investment company last year, paving the way for PICC's entry into private equity firms and other industries.

 

"We aim to expand our business into other financial sectors through equity investment," said Sheng Hetai, general manager of PICC Group's strategic planning department. "We are looking at merger and acquisition opportunities in banks and fund management companies, especially city commercial banks and rural cooperatives."

 

Last year, PICC paid 1.5 billion yuan for a 15 percent stake in Datang Mobile Communications Equipment Co, the main developer of China's 3G mobile technology. It also invested in a 2 billion yuan energy project.

 

"But we haven't had any banks contact us about equity investment in PICC yet," Sheng said.

 

The banking and insurance regulators signed a memorandum of understanding on cross-sector investment last Tuesday. Detailed guidelines are expected soon.

 

PICC Group's premiums were up 31 percent to 96 billion yuan at the end of last year, at a growth rate 6 percentage points higher than the market average. Assets under management also increased 68 percent on a yearly basis.

 

The group's life insurance arm, PICC Life Insurance Co Ltd, is a major contributor. The company added another 25 branches in 2007, taking its provincial outlets to 29. Its premium income also increased fivefold from 800 million yuan in 2006 to 4.4 billion yuan in 2007.

 

"We hope to raise that figure to 10 billion yuan by the end of 2008," said Lan Yadong, assistant president of PICC Life Insurance Co Ltd.

 

The group's investment return also hit a record high of 15.2 percent last year, with investment yield totaling 7.86 billion yuan.

 

(China Daily January 31, 2008)