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Headquartered in Beijing, the CNY 500 million-registered venture will focus on life insurance, health insurance, accident insurance and related reinsurance. In addition to employees of Hainan Airlines Group, parent of Hainan Airlines, the venture expects to enjoy rapid development by advantage of the group's huge consumers. Statistics show that the group has over 39,000 employees, currently and achieved a passenger handling capacity of more than 20 million person-times in 2008.
Focusing on airline industry, Hainan Airlines Group will attach more importance to financial service in the future, Cheng Feng, chairman of the group, said in an interview on June 8. It has stretched out reach to the fields like futures brokerage, financial leasing, trust, financial firm and life insurance and plans to enter the domestic property insurance sector next.
So far, all of China's top four airways have marched into the domestic insurance market. China Eastern Airlines Corp. Ltd. (SSE: 600115, SEHK: 0670, and NYSE: CEA) set up a 50-50 joint venture namely Cathay Life Insurance Co., Ltd. (Shanghai) with Cathay Life Insurance Co. (2805.TW), the biggest life insurer in Taiwan, in December 2004. China National Aviation Holding Co., parent of Air China Ltd. (SHSE: 60111 and SEHK: 0753), established a 50-50 joint venture namely Samsung Air China Life Ins. Co., Ltd. with South Korean life insurance giant Samsung Life Insurance in May 2005. China Southern Airlines Co., Ltd. (SHSE: 600029, SEHK: 1055, and NYSE: ZNH), the biggest carrier in China by fleet, bought into Sunshine Property and Casualty Insurance Co., Ltd., a Beijing-based property insurer, in July 2005.
Those joint venture insurers should grow fast on the base of huge consumers of their airlines shareholders. However, except Sunshine Property and Casualty Insurance, other two are on the verge of loss-making operation. The premium revenue Cathay Life Shanghai and Samsung Air China Life gained last year stood at CNY 599 million and CNY 123 million, respectively, translating into a market share of not more than 0.1 percent in total. Notably, hurt by the global financial crisis, most airlines companies in the country reported losses in 2008.
(USD 1 = CNY 6.83)
Source: www.hexun.com (June 11, 2009)
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