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Last updated at: (Beijing Time) Thursday, October 30, 2003

PICC P&C's capital raising positive for mainland's nonlife insurance sector��S&P

Standard & Poor's Ratings Services said Wednesday that plans by PICC Property & Casualty Co.(PICC P&C) to raise over 4.3 billion HK dollars (555 million US dollars) in equity through a proposed listing on the Hong Kong stock exchange, is a positive development for the nonlife insurance industry in the Chinese mainland.


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Standard & Poor's Ratings Services said Wednesday that plans by PICC Property & Casualty Co.(PICC P&C) to raise over 4.3 billion HK dollars (555 million US dollars) in equity through a proposed listing on the Hong Kong stock exchange, is a positive development for the nonlife insurance industry in the Chinese mainland.

"Our analysis shows conclusively that additional capital is absolutely necessary to support the continuing growth and future development of Chinese mainland's insurance industry," said Standard & Poor's credit analyst Connie Wong.

She said "given that PICC P&C is China's dominant nonlife insurance player, with about 70 percent of the market in terms of direct nonlife premiums, a successful equity raising by the company would certainly boost the financial strength of the overall nonlife sector."

"China's insurance industry, as a whole, would also be likely to benefit from the additional transparency that would be created by the listing of a major player such as PICC P&C on the Hong Kong stock exchange," Wong said. "This would provide a further degree of comfort to policyholders and counterparties alike."

Earlier Wednesday, Standard & Poor's released two commentary reports entitled "China's Rapidly Growing Insurance Sector in Need of Capital" and "Insurance Industry Risk Analysis: China."

These groundbreaking reports attempt to put some value on the levels of fresh capital required by Chinese insurers and analysis of the Chinese insurance market.

PICC P&C is scheduled to be listed on Hong Kong stock exchange on Nov. 6.




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