In this series, we compare six of China's largest, publicly-listed insurance companies:
China Life Insurance (中国人寿)
China Pacific Insurance (CPIC)(中国太平洋人寿)
China Taiping Insurance (中国太平保险)
New China Life Insurance (新华保险)
People's Insurance Company of China (PICC)(中国人民保险)
Ping An (中国平安)
In this article, we introduce the history and development of China's insurance industry and the six insurers under consideration. In Part 2, we compare the six insurers based on various financial and business metrics, and conclude by discussing the future of China's insurance industry.
It is noted that no official ranking exists to compare the relative sizes and scale of China's insurers, although Chinese insurance companies are included in international rankings. Based on the most recent data provided by the Sovereign Wealth Fund Institute (here), Ping An ranked as the world's largest insurer in terms of total assets, while China Life Insurance and China Pacific Insurance ranked 4th and 34th respectively. According to Reinsurance News (here), China Life Insurance, Ping An, PICC, and China Pacific Insurance were four of the world's top 20 largest insurers based on net premiums written in 2021.
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Introducing China's Insurance Industry
Small private insurance businesses have existed in China since the 1920s, during the Republic of China era.
In 1949, the same year as the founding of the People's Republic of China (PRC), the People's Insurance Company of China (PICC)(中国人民保险公司) was founded as China's first state-owned insurance company.
As communist reforms swept over the country, several changes took place during the subsequent decade. In 1951, the small private insurance companies that existed prior to the founding of the PRC were consolidated into two state-owned enterprises: Taiping (太平) and Xinfeng (新丰). In 1958, both Taiping and Xinfeng ceased to operate as the insurance business was deemed as unnecessary in a socialist country. Similarly, PICC ceased to operate in 1959.
China's insurance industry was revived following the country's economic opening up in the late 1970s. In 1979, PICC was reinstated. In 1988, Ping An Insurance Company (平安保险公司) was established. In 1991, state-owned insurer China Pacific Insurance Company (中国太平洋保险公司) was formed from what was originally the insurance arm of the Bank of Communications Shanghai Branch (交通银行上海分行). In 1992, AIA China was formed as the first foreign insurance company to operate in modern (i.e. PRC) China. In 1994, Minsheng Insurance (民生保险) was given approval to form as the first majority privately-held (as opposed to state-owned) insurance company.
Note: Ping An is currently a privately-owned (i.e. not state-owned) company. It was founded as China's first joint-stock insurance company, although it is possible that the shareholders might have been majority state-owned enterprises, hence why Minsheng Insurance is the first majority privately-held insurance company to be found in China even though Ping An was established first.
In 1996, New China Life Insurance Company Limited (新华人寿保险股份有限公司) was founded. In 1999, PICC was restructured with the company's life insurance business carved out to form China Life Insurance Company (中国人寿保险公司), while PICC's mother holding company carved some of its international businesses out to form China International Insurance Holdings (中保国际控股有限公司), the predecessor to what is now China Taiping Insurance (中国太平保险).
Initially, only 100% Chinese-owned insurance companies were allowed to operate in mainland China. However, in 2004, the Chinese government published a series of regulations that permitted foreign companies to form and own up to 50% of joint ventures with Chinese insurers. Qualified foreign companies to form such insurance joint ventures were required to have an operating history of 30 years or more, as well as a minimum of US$5 billion in total assets. The 50% ownership restriction was removed in 2020, allowing fully foreign-owned insurance companies to operate in China henceforth.
Note: notably, AIA China was operating as a fully foreign-owned insurance company since it commenced operations in 1992. The company was probably allowed to operate in spite of the foreign ownership restriction due to its significant contributions to China's economic opening-up.
In April 2023, the Insurance Association of China (中国保险行业协会) reported having 347 member companies, of which 13 were insurance group (集团) companies.
Note: group (集团) companies tend to be structurally more complex companies that operate on a larger scale, such as companies that operate on a nationwide basis rather than at the smaller local or regional level
Introducing China's Largest Insurers
In this section, we provide some further background information on each of the six insurers.
China Life Insurance (中国人寿)(HKEX: 2628)(SHA: 601628)
China Life Insurance is a state-owned insurance company formed as a result of the spin-off of PICC's life insurance unit in 1999. The company initially offered only life insurance products and services but gradually expanded its scope of coverage to also include accident and health. China Life went public on the Hong Kong Stock Exchange (HKEX: 2628) and New York Stock Exchange (NYSE: LFC) in December 2003, with the dual listing becoming the world's largest IPO that year. In 2007, China Life had a third listing on the Shanghai Stock Exchange (SHA: 601628). In September 2022, China Life voluntarily delisted from the New York Stock Exchange, presumably due to the rising political tensions between China and the US.
China Pacific Insurance (CPIC)(中国太平洋人寿)(HKEX: 2601)(SHA: 601601)(LSE: CPIC)
China Pacific Insurance is a state-owned insurance company founded from the insurance division of the Bank of Communications Shanghai Branch (交通银行上海分行). The company and its subsidiaries are primarily engaged in the provision of life, health, and property and casualty insurance, but also has a supplementary asset management business. China Pacific Insurance went public on the Shanghai Stock Exchange (SHA: 601601) in 2007 and subsequently on the Hong Kong Stock Exchange (HKEX: 2601) in 2009. In 2020, the company listed on the London Stock Exchange as the first Chinese insurer to issue global depositary receipts in what was London's largest IPO for the year.
China Taiping Insurance (中国太平)(HKEX: 0966)
China Taiping Insurance is a state-owned insurance company that was originally founded in 1951 as a state-owned enterprise which consolidated the many private insurance businesses in existence prior to the founding of the PRC. This predecessor of China Taiping ceased operations in 1958 in line with communist reforms as the insurance sector was deemed as unnecessarily in a socialist country. The current China Taiping Insurance was founded in 1999 when PICC's mother holding company, China Insurance Group (中保集团), carved out some of its international businesses to form China International Insurance Holdings (中保国际控股有限公司). China International Insurance Holdings expanded to the mainland China market in 2001 under the business entity Taiping Life Insurance (太平人寿保险有限公司). In 2006, China International Insurance Holdings was renamed China Taiping Insurance (中国太平保险). China Taiping Insurance went public on the Hong Kong Stock Exchange (HKEX: 0966) in 2015.
China Taiping Insurance is primarily engaged in the provision of life insurance, as well as property and casualty insurance, reinsurance, and a variety of supplementary businesses including asset management, financial leasing, property investment, securities dealing, and insurance intermediary and broking services. In 2022, 89% of China Taiping's revenue was generated from mainland China, while non-insurance businesses accounted for less than 2.9% of total revenue.
New China Life Insurance (新华保险)(HKEX: 1336)(SHA: 601336)
New China Life Insurance is a state-owned insurance company founded in 1996. The company primarily focuses on offering life and health insurance products and services with a supplementary asset management business. New China Life Insurance went public on the Hong Kong Stock Exchange (HKEX: 1336) and Shanghai Stock Exchange (SHA: 601336) in 2011.
People's Insurance Company of China (PICC)(中国人民保险)(HKEX: 1339)(SHA: 601319)
PICC is a state-owned insurance company originally established in 1949, the same year as the founding of the PRC. As communist reforms swept over the country, PICC ceased to operate domestically in 1959, although a small number of the company's foreign-facing businesses were kept, most of which focused on shipping and trade. In 1979, PICC was reinstated as part of China's economic opening up. In 1999, PICC was restructured with its life insurance business carved out to form China Life Insurance (中国人寿) and its reinsurance business carved out to form China Reinsurance Group (中国再保险集团). PICC's mother holding company was also restructured with some of its international businesses carved out to form China International Insurance Holdings (中保国际控股有限公司), the predecessor to what is now China Taiping Insurance (中国太平保险).
PICC went public on the Hong Kong Stock Exchange (HKEX: 1339) in 2012 as the largest IPO in Asia Pacific that year. The company subsequently went public on the Shanghai Stock Exchange (SHA: 601319) in 2018.
PICC's property and casualty subsidiary, PICC Property and Casualty (中国人民财产保险), is also listed on the Hong Kong Stock Exchange (HKEX: 2328). PICC Property and Casualty was the first state-owned Chinese enterprise to pursue an offshore (i.e. outside mainland China) listing in 2003.
PICC originally focused on offering non-life insurance products and services, but gradually expanded its scope of business to also include life insurance coverage, as well as a supplementary asset management business, an insurance agency business, and a reinsurance business.
Ping An (中国平安)(HKEX: 2318)(SHA: 601318)
Ping An was originally founded in 1988 as an insurance company, but gradually grew to become a diversified financial conglomerate with businesses spanning retail, corporate and investment banking, asset management, brokerage and financial advisory services, trust services, as well as financial technology and health technology services. In 2022, insurance business segments accounted for 72.2% of Ping An's total revenue, while insurance and asset management segments combined accounted for 75.9% of total revenue.
*Ping An provides both traditional and financing trust services. Traditional trust services refer to fiduciary arrangements where Ping An serves as a trustee and manages and invests assets on behalf of clients. Financing trusts refer to a specific form of trust used in China where special purpose entities called "trusts" (信托) (see here) are set up with the purpose of raising funding for specific projects with a limited timespan (e.g. real estate or infrastructure development).
Explore Ping An in our Introducing Ping An article here.
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