Aviva, the world's fifth-largest insurance group, plans to set
up a pension company and a fund management firm by the end of this
year as part of its efforts to strengthen its business in China,
said Aviva Asia's managing director yesterday.
"We've filed an application to establish an independent pension
business to the China Insurance Regulatory Commission," Aviva Asia
Managing Director Charles Anderson told China Daily, adding
that preparations for the new company will be completed by the end
of this year.
Currently, Aviva has a 50-50 joint venture life insurance
company with COFCO Limited.
"We will still join hands with COFCO in tapping into China's
pension business, a sector that has a huge potential," said
Anderson.
China has only three pension companies: Taiping, Ping An and
China Life Pension, all wholly owned Chinese firms. But with the
aging population rapidly growing in the country, the pension
business is becoming increasingly attractive for life insurers.
"More customer education is needed in China's pension market,"
Anderson said when asked about the major challenges in this
emerging market. "And we will bring in more innovative pension
products."
Aviva is also actively seeking another partner in launching a
fund management company.
"Besides COFCO, we would like to have another initiator for the
fund management company, but Aviva will be the controlling
stakeholder of the new firm," Anderson said.
According to Kathleen Jiang, head of the strategic planning
sector of Aviva China, setting up a brand new firm will make the
stake structure clearer though it will be more time-consuming
compared with acquiring an existing company.
"We prefer the partner to be a security firm or a trust
company," said Jiang, adding the industry regulator is quite
supportive of Aviva's initiative.
Beijing-based Aviva-COFCO Life Insurance opened for business in
2003 and operates in six provinces. In January, the insurance
regulator approved Aviva-COFCO to increase the company's registered
capital by 400 million yuan to 900 million yuan. "Another capital
injection is expected to be completed before the end of August,"
said Anderson, but declined to elaborate.
(China Daily June 26, 2007)