HSBC to start insurance venture in China this year
(Bloomberg)
Updated: 2006-06-07 15:33
HSBC Holdings Plc, Europe's largest bank by market value, said it'll start an
insurance venture in China by the end of this year, tapping into a demand by the
growing middle class for protection products.
HSBC is setting up the venture with a Chinese company, said Peter Wong,
executive director for Hong Kong and China, on the sidelines of a conference in
Shanghai today. He declined to name the partner.
International companies are competing to get into China's insurance market,
which expanded 14 percent to 493 billion yuan (US$61 billion) last year, helped
by economic growth and an emerging middle class. Urban households that earn more
than 25,000 yuan a year are expected to rise to 215 million by 2015 from 43
million last year, according to a report by McKinsey & Co. issued earlier
this month.
Bank of Communications Ltd, 19.9 percent held by HSBC, isn't participating in
the venture because domestic lenders aren't allowed to do insurance business in
China, Wong said. HSBC would be the only foreign shareholder in the venture, he
said, declining to give more details.
HSBC said last September that it's partnering with Hong Kong's Hang Seng Bank
Ltd., in which it has a 62 percent stake, to invest in a life insurance venture
in China. The bank owns 19.9 percent of Ping An Insurance (Group) Co., the
country's second-biggest insurer.
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