ICBC, AIA sign insurance distribution agreement

HONG KONG, Sept 10 (BestGrowthStock) – Industrial and Commercial Bank
of China Ltd (ICBC) (1398.HK: ) and soon-to-be listed AIA Group Ltd
have signed an agreement under which ICBC will sell AIA’s life
insurance products at its branches, the two companies said on
Friday.

The distribution agreement comes as AIA, American
International Group Inc’s (AIG.N: ) Asian life insurance unit,
prepares for a Hong Kong initial public offering that could raise
about $15 billion. [ID:nTOE686071]

AIA, the only foreign company to own its Chinese operating
licence outright, already has 80 similar agreements with banks in
the Asia-Pacific region.

“By leveraging core strengths … we aim to build a strong
foundation and platform to help us take full advantage of the
rapid development in China’s bancassurance business,” AIA Chief
Executive Mark Tucker said in a statement.

China is the world’s sixth-largest life insurance market,
with about $96 billion in total premiums collected in 2008.

“AIA will work jointly with ICBC in areas such as sales and
marketing system, product innovation, service quality,
technological advancement and sustainable profitability,” Tucker
added.

ICBC (601398.SS: ), the world’s largest bank by market value,
has more than 16,000 branches.

AIA is the dominant foreign life insurer in China, accounting
for an about 21 percent market share of premiums earned by
foreign life insurance companies in 2008. Still, that is merely 1
percent of total life insurance premiums earned by domestic and
foreign life insurance companies.

Bancassurance is a business model employed by many insurance
companies through which they use bank branch networks to sell
their products.

AIA already has 17 bancassurance agreements in China.
(Reporting by Denny Thomas and Clare Jim; Editing by Chris
Lewis)

ICBC, AIA sign insurance distribution agreement