Anbang Property and Casualty Insurance Co, the country's second-largest non-life insurer by registered capital, plans to expand its business into the life insurance sector, its top management said.
"We have sent the application to the China Insurance Regulatory Commission and now we're waiting for final approval," said Yao Dafeng, general manager of Anbang. The life arm, which could take advantage of the widespread outlets and marketing channels of Anbang's non-life insurance company, could create a new revenue flow for the firm, Yao said.
Established in 2004, Anbang has set up 37 branches within two years and extended its outlets to the country's 31 provinces, municipalities and autonomous regions, marking the country's fastest geographical expansion in the insurance sector.
"Strong capital support is one of the major reasons (for expansion)," Yao said. After two rounds of capital injection, the registered capital of Anbang topped 3.79 billion yuan (US$479.7 million), only second to PICC Property and Casualty Insurance Co, the country's largest general insurance company.
China Petroleum & Chemical Corporation (Sinopec), the country's largest oil refiner, gave Anbang its first capital boost by pouring in 338 million yuan (US$42.8 million) last September. Sinopec got a 20 per cent stake in return. Sinopec and Shanghai Automotive Industry Corp are the firm's two largest shareholders.
"Due to sufficient cash flow, we don't have plans to raise money in the short term," Yao said. "We can count on a handsome profit from soaring premiums this year." In the first 11 months of this year, Anbang raked in over 4 billion yuan (US$506 million), ranking fifth among the country's non-life insurers.
Since its establishment, Anbang has run an "Auto Vehicle Dealers Growth Project," which gives dealers involved in the scheme special benefits in terms of priority to deliver vehicles, more favorable financial terms and better prices for spare parts.
The moves are aimed at offering customers a more favorable price when buying auto vehicle insurance policies. Although dealers may earn less in insurance agent fees, they can get much more profit from new car sales and services.