MetLife, the US's largest life insurer, has applied to the Chinese industry regulators for permission to integrate its ventures in China, in a move to compete more fiercely in the market, senior management said in New York.
The group, which has two businesses in China - Sino-US MetLife Insurance Co Ltd, a 50-50 joint venture between Beijing Capital International Airports Corp and MetLife, based in Beijing, and United MetLife Insurance Co headquartered in Shanghai - said it is now waiting for a response and confirmation.
"We've filed the application to the industry regulator, but the progress still depends on our Chinese partners and the China Insurance Regulatory Commission (CIRC)," said William J. Toppeta, president of the international department of MetLife.
United MetLife Insurance Co, the group's Shanghai-based firm, was set up in 2005 when MetLife acquired Citi Group's insurance division for $11.5 billion. In this instance, the CIRC approved Citi Group's application to set up a joint venture life insurer with Shanghai Alliance Investments Limited.
Asked which of the two ventures would head the company on the mainland, Toppeta said it was not necessary to have a single headquarters in a country as vast as China.
"We might consider a listing in China besides our current listing on the NYSE, but before that, we would like to complete the merger," he added.
MetLife's international business contributed 12 percent to the company's revenue for 2007, with the growth rate almost double that of the firm's domestic business.
"We are always looking at M&A opportunities to fuel our expansion. But such chances seem to be very few as we are still in the emerging stage in China," Toppeta said.
Sino-US MetLife, the company's Beijing enterprise, has just received the go-ahead from the China Insurance Regulatory Commission to increase its registered capital from 500 million yuan to 800 million yuan. Both MetLife and Beijing Capital International Airports Corp, will contribute 150 million yuan each.
The capital injection refutes a market rumor that Beijing Capital International Airports Corp was looking to sell its holdings in the joint venture. However, earlier this year, Beijing Capital International Airports Corp did say it would like to focus on its core business.
Not all agree. "Sino-US MetLife's rapid growth in bancassurance and telemarketing may make Beijing Capital International Airports Corp change its mind," said Wang Xiaogang, an analyst from Orient Securities.
From January to April this year, Sino-US MetLife saw a premium income of 670 million yuan, which is almost four times that of the same period last year. The proportion of bancassurance also jumped from 54 million to 455 million yuan.
Bancassurance will remain a channel that MetLife will look to strengthen in the Asia-Pacific region, said Tracey Perkins, head of MetLife's bancassurance business.
Source: China Daily