Prudential Financial, Inc. (NYSE: Pru) and Fosun International (Fosun, HK 00656), announced today that they have received approval from the China Insurance Regulatory Commission (CIRC) on the preparation to launch a new life insurance joint venture company (JV) in China. The company will be the only life insurance joint venture in China between a non-state-owned enterprise and a foreign capital enterprise.
The JV will start with registered capital of RMB500 million (USD$78 million) with the Prudential Insurance Company of America (PICA), the U.S. insurance arm of Prudential Financial, and Fosun each contributing 50 percent of it. The joint venture will be headquartered in Shanghai, and it is expected to begin operations in the fourth quarter of 2012, following receipt of final approval by CIRC and other regulatory authorities.
China's insurance market has seen years of high growth rate, but the insurance penetration and density are still far below global average level, which indicates great growth potential. According to CIRC, life insurance premium (including health and personal accident insurance) amounted to RMB 1.06 trillion in 2010.
"We are very pleased with CIRC's decision to grant approval for this venture and we look forward to making a valuable contribution to Chinese society by providing life insurance protection. In Fosun, we have found a company with whom we share similar business philosophies and a commitment to China's future development," said Mark Grier, Vice Chairman of Prudential.
With approximately $883 billion of assets under management as of June 30, 2011, Prudential has operations in the United States, Asia, Europe, and Latin America. Prudential's diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, investment management, and real estate services. In the U.S., the company's iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century.
Prudential has a presence in China through a Beijing-based Representative Office of PICA, Everbright Pramerica Fund Management Co., Ltd., headquartered in Shanghai, Pricoa Consulting (Shanghai) Co., Ltd. and Pricoa Relocation Hong Kong Limited.
"Fosun's investment in the life insurance joint venture indicates our progress in learning from Mr. Warren Buffet's philosophy of long-term value investment. Meanwhile it also has crystallized Fosun's business model of combining China's growth momentum with global resources. We expect to realize synergistic growth by connecting Chinese people's growing demand for social security and Prudential's expertise in this area," said Guo Guangchang, Chairman of Fosun.
Fosun was founded in 1992. Its current holdings include business players in pharmaceuticals and healthcare, property, steel, mining, retailing and other investment touching many aspects of Chinese society, including Yong'an Property Insurance based in Xi'an, China. Fosun is the largest non-state-owned enterprise in Shanghai.
According to Grier and Guo, the JV's first priority will be to establish a management team and to begin building the company. Kenny Wu, who has many years of working experience in China's life insurance market, will head the JV's preparation team. The senior management team will be jointly selected by PFI and Fosun.
Pramerica and Pricoa are trade names used by PFI and its affiliates in selected countries outside the United States. For more information about PFI, please visit http://www.prudential.com.
Fosun International is the parent company of Fosun Group. For more information about Fosun, please visit http://www.fosun.com.
Contacts:
Prudential Financial, Inc.
Bob DeFillippo, 973-802-4149
M:
973-954-8335
bob.defillippo@prudential.com
or
Fosun
Group
Frank Chen, 0086 21 6332 0626
chenbo@fosun.com
