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When asked of the deal, an insider from the board office of the Beijing-based company said that he did not hear about any information. Another executive of China Life Insurance (Group) Company, the parent of China Life, also said that he did not know anything about the deal. A director of China's insurance industry regulator China Insurance Regulatory Commission said that the chance is small for any Chinese insurer to acquire the assets of AIG.
The US insurer currently is planning to sell the non-core business, including the private banking business and American International Assurance Co., Ltd. (AIA), the Asian subsidiary wholly owned by AIG.
On hearing of the news, leading Chinese financial institutions have shown their strong interest. They include the nation's biggest commercial bank Industrial and Commercial Bank of China, China Life and China Investment Corp. Also, AIA disclosed that about 30 institutions now are interested in its assets.
However, as many Chinese financial institutions have suffered losses from overseas investments, China Life is advised to be cautious when making investment this time.
In May 2007, China Investment Corp. purchased a 10% sake in a US private equity firm called the Blackstone Group, from which, the former has suffered about USD 2 billion floating losses. This January, the Chinese governmental investment agency also bought in Morgan Stanley for a consideration of USD 5 billion and now suffered about USD 4 billion floating losses.
Another player Ping An Insurance (Group) Company of China, Ltd. (601318.SH) last November acquired some stake in Fortis, a leading financial group in Europe, at up to CNY 23.87 billion, but such investment generated about CNY 18.8 billion losses so far.
As for China Life, it had as much as CNY 30.5 billion cash flow as of September 30, 2008. So the chief investment officer Li Lefei and the president Wan Feng of the listed life insurer have repeatedly expressed that China Life is to make investments abroad at an appropriate time. Li Lefei said that China Life is to make overseas investments as soon as possible and Wan Feng said that the life insurer is to select a target project in a short time.
(USD 1 = CNY 6.87)
Source: www.hexun.com (December 08, 2008)
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