updated 10/9/2003 5:56:35 AM ET 2003-10-09T09:56:35

American International Group, the US-based insurer, said Thursday it plans to take a 9.9 per cent stake in PICC Property and Casualty, China’s largest property insurer, as part of a strategic alliance with the mainland company ahead of its listing next month.

AIG SAID it would cooperate with PICC, which is set to begin marketing the $500 million initial public offering next week, to develop accident and “supplemental health insurance products” in China.

“AIG will share in the growth of this business through a reinsurance arrangement under which PICC P&C will reinsure certain accidental and health risks in China with AIG subsidiaries,” AIG said in a statement.

PICC is the first of three major Chinese insurers planning to list on international markets over the next few months as part of moves by Beijing to reform the sector through partial privatisations, which may help the domestic players cope with increasing foreign competition.

For PICC, the presence of a large strategic foreign investor will serve as a vote of confidence in its IPO, whose fortunes will in turn determine the prospects of the planned offerings by its peers, China Life and Ping An.

The deal follows efforts by other mainland Chinese companies to seek prominent foreign investors ahead of their listings. Bank of China (Hong Kong) sold a stake to Standard Chartered through its IPO and Sinopec invited Exxon Mobil, BP Amoco and Royal Dutch/Shell to buy its shares.

Based on market expectations that PICC will list a 25 per cent stake for US$500m, AIG’s stake would be valued at about US$200m.

However, AIG declined to reveal details regarding the deal. It remains unclear whether it would purchase the stake via the IPO or buy the shares separately.

© The Financial Times Ltd 2003. "FT" and "Financial Times" are trademarks of the Financial Times.

© The Financial Times Ltd 2013. "FT" and "Financial Times" are trademarks of the Financial Times.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%