CHINA Pacific Insurance Co plans to acquire a controlling stake in Anxin Agricultural Insurance Co and expand its agricultural businesses to make the insurer's property unit more competitive.
CPIC Chairman Gao Guofu yesterday said the company will increase its stake in Anxin to more than 51 percent from the current 34.34 percent after the plan is approved by the China Insurance Regulatory Commission.
The move could increase Anxin's sales using CPIC's network, and within the next two years make the agricultural business the second-largest sector in the property unit.
The comment was made as CPIC reported a 60.4 percent net profit increase for the group to 17.73 billion yuan (US$2.7 billion).
However, the combined ratio of its property unit was 99.8 percent, pointing to only marginal underwriting profit. The profitability of CPIC's property unit had already rebounded from a loss recorded in 2014, but Gao said the ratio is fragile and the group will continue to focus on quality and enhance fundamentals.
"The government report this year highlighted the development of agriculture, critical disease and disaster insurance sectors as major tasks," Gao said. "We will increase investment in these areas."
CPIC's annual report also revealed its gross investment returns reached a five-year high of 7.3 percent despite domestic stock market volatility in the second half.
The life insurance unit recorded a nearly 40 percent increase in new business value, a major profit indicator.
Huatai Securities Co said CPIC's value-oriented reforms of its life insurance unit have taken effect and boosted revenue, and the fast development of its asset-management arm is helping improve investment returns.
(Source: Shanghai Daily, By Feng Jianmin)
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