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Green light for HSBC life insurance JV

HSBC yesterday said it has regulatory approval to launch a life insurance joint venture with National Trust Ltd.

The China Insurance Regulatory Commission has approved HSBC and Beijing-based National Trust as equal partners in the joint venture, HSBC Life Insurance Co, which will have a registered capital of 500 million yuan (US$73.2 million). It will open for business in the third quarter of this year.

"This investment will allow us to further broaden our insurance offering in China where economic growth is estimated to be 7.8 percent this year, and the growing personal wealth base will drive the use of insurance products," said David Fried, chairman and chief executive officer of HSBC Insurance for Asia Pacific.

HSBC Life will offer life, pension and medical insurance products. It will employ an agency sales force and have bancassurance partnerships in selling its policies.

Insurance penetration, or premiums as a percentage of the economy, is low at 3.3 percent in China, sharply lower than in more mature markets such as the United Kingdom where it is 18 percent.

China is targeting an economic growth of 8 percent this year despite the global financial crisis. The World Bank and the International Monetary Fund have forecast a growth of 6.5 percent.

HSBC also holds 16.78 percent of Ping An Insurance (Group) Co.


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