AIA Gained Foothold In China

Insurance giant AIA Co. Ltd. has received approval from China’s top insurance regulator to set up the first wholly offshore-owned life insurance company on the Chinese mainland. AIA will convert its Shanghai Branch into a wholly-owned subsidiary. AIA is a subsidiary of Hong Kong-listed AIA Group Ltd., which is one of the largest life insurance groups in Asia.

The approval marks the latest development in the mainland’s broader drive to grant overseas investors wider access to its financial markets. In November 2017, China promised to let overseas investors own up to 51% of any life insurance joint venture, according to a consensus that Beijing and Washington reached. Last July, China said that the overseas ownership cap would be abolished by 2020.

The insurance regulator has approved Lee Yuan Siong and Zhang Xiaoyu to serve as chairman and general manager of the new life insurer. Lee, who resigned last year from his position as co-CEO of insurance giant Ping An Insurance (Group) Co. of China Ltd., is now AIA Group’s chief executive and president. Zhang, also known as Fisher Zhang, is CEO of AIA Group’s China business.

The license approval will help accelerate the process for AIA Group to set up new branches across China, which is the fastest-growing market for the group.