FWD Group, the Hong Kong based insurance business of Pacific Century Group, is planning to set up a life insurance joint venture in Shanghai, as China opens up its financial sector to more foreign investment, according to the South China Morning Post (SCMP).
Under China’s new policy, FWD can take up to a 51% stake in the new venture, the remainder of which will be held by two unnamed Chinese partners.
FWD declined to share any further details regarding its partners or the shareholder structure of the joint venture, only saying that it sees “a significant opportunity in China to meet the financial and insurance needs of mainland customers.”
China has embarked on a new policy of opening up its strictly regulated financial industry as protectionism and trade frictions are becoming growing concerns.
Among other recent changes that aim to increase transparency and reduce risk in China’s financial sector are new rules that restrict individual shareholders to no more than 33% ownership in insurance companies, as well as plans to merge the country’s insurance and banking regulators.
SCMP noted that FWD was the fourth large foreign re/insurer to take advantage of China’s relaxed regulations in recent weeks, with Willis, AXA, and Allianz all planning expansions into the market via new or existing companies or through joint ventures.
FWD currently services around 2.7 million customers in Asia with operations across Hong Kong, Macau, Thailand, Indonesia, the Philippines, Singapore, Vietnam and Japan. The company is also minority owned by reinsurance giant Swiss Re.
