China Life races to beat rivals to market with $3bn flotation

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The Independent Online

China's biggest life insurerer, China Life, is set to beat its rivals in the race to become the first to list overseas with an initial public offering to raise up to $3bn (£1.9bn).

The state-owned insurer is expected to file a request to float on the Hong Kong and New York stock exchanges in the next few days and may list as early as next month. It had planned to raise up to $2bn, but Wang Xianzhang, president of the company, said yesterday that bumper profits last year had led its advisers to push China Life to raise more.

A listing in September is likely to make China Life the first of three Chinese insurers to go public in Hong Kong. It is being advised by Citigroup, Credit Suisse First Boston, Deutsche Bank and China International Capital Corporation.

The People's Insurance Company of China (PICC) and Ping An are also hungry for fresh capital to sell their products to China's 1.3 billion-strong population. Insurers in the region are benefiting from a growing shift towards private insurance provision from the public sector, as well as rising household incomes.

PICC, advised by Morgan Stanley, has been looking to tap the equity markets with an initial offering of $500m-$750m, while Ping An, China's second-largest insurer, is thought to want to raise up to $2.6bn in its listing, scheduled for the end of this year. Goldman Sachs, Morgan Stanley and HSBC have bought a stake in the company and are also its advisers.

Some investors said the first insurer to list overseas could steal a march over the other two in the rapidly growing insurance market in China. Analysts forecast that there will have been a 45 per cent increase in life insurance premium income in China this year. The share sales are part of plans by the Chinese government to sell up to $50bn of shares in its businesses to international investors in the next decade.