BEIJING - The People's Insurance Company of China (PICC) and PICC Life on Thursday inked a joint venture agreement with American International Group (AIG) to form an agency distribution company.

In December 2012, AIG invested $500 million as the largest cornerstone investor in the PICC initial public offering. In connection with this investment, PICC Life and AIG agreed to form this joint venture.

Both sides planned to jointly invest 100 million yuan ($16.16 million) in the agency distribution company, aiming to offer Chinese consumers trustworthy life and retirement insurance products, with its first offices to be opened in Beijing and Shanghai, under the agreement.

"The joint venture will take advantage of the combined merits of both sides to provide comprehensive and high-quality financial insurance services to Chinese well-off consumers through innovative products, service and sales," said Li Liangwen, president of PICC Life.

Founded in 1949, PICC is the largest insurance company in China. In 2012, it ranked 292nd in the 2012 edition of the Global 500 published by Fortune magazine.

American International Group Inc is a leading international insurance organization serving customers in more than 130 countries. AIG Insurance Company China Limited is a wholly owned subsidiary of AIG, headquartered in Shanghai.