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Sino-foreign life venture gains regulatory approval for capital increase

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Dalian-registered BOB-Cardif Life Insurance has announced that it has received the approval of the Dalian Banking and Insurance Regulatory Bureau to increase its capital by CNY900m ($141.4m) or 33.7% to CNY3.57bn.

After the capital increase, the shareholding structure will remain unchanged at 50-50. The two shareholders of the joint venture—Bank of Beijing (BoB) and BNP Paribas Cardif — will each inject CNY450m as the additional capital, according to a statement posted on 8 February on the website of the Insurance Association of China, when the life insurer revealed plans for the capital increase.

BoB-Cardif Life said at the time that the additional funds were to accommodate the business development needs of the company.

The capital increase proposal had been unanimously approved by the board of directors of BoB-Cardif Life on 27 October 2021.

It is understood that the CNY900m capital increase will be the first such fund injection for the company since May 2019 when the insurer received additional capital of CNY320m.

In 2021, BoB-Cardif Life posted gross premium income of CNY8.44bn, a year-on-year increase of 33.08%, and its net profit stood at CNY8.37m, a year-on-year increase of 48%. As of the end December of 2021, the company’s core solvency and comprehensive solvency adequacy ratio were both 170.45%, exceeding minimum solvency requirements.

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The joint venture was established in November 2002 as one of the first Sino-foreign life insurers approved after China’s accession in 2001 to the World Trade Organization. The insurer’s original shareholders were Beijing Capital Group and NN Group, which was formerly part of ING Group of the Netherlands. At that time, the venture was named Beijing Capital Antai Life Insurance.

In June 2010, BoB acquired Beijing Capital Group’s 50% stake in the life insurer which was then renamed ING-BOB Life Insurance. In July 2013, ING announced that it had agreed to sell its 50% stake in the venture to BNP Paribas Cardif. The life venture then adopted its current name.

In recent years, many insurers in China have increased their capital. One important factor driving this is the China Risk-Oriented Solvency System (C-ROSS) Phase 2 which insurers are to begin to comply with in their 1Q2022 solvency reports. Insurers raise capital to ensure that they can meet the C-ROSS Phase 2 requirements.

This year to date, insurers that have increased their capital included Pramerica Fosun Life (increase of CNY1bn); Taikang Pension (CNY1bn) and BOC-Samsung Life (CNY2.4bn).

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