HSBC Holdings (0005.HK) announced that its subsidiary, HSBC Insurance, has received approval from China's insurance regulator to jointly establish a joint venture insurance company with National Trust. HSBC Bank becomes the first foreign bank approved to set up an insurance company on the mainland.
Just two days ago, on September 25, Guo Shuqing, chairman of the Construction Bank of China, "high-profilely" stated that the plan for CCB and Ping An Insurance to jointly establish a joint venture insurance company is awaiting regulatory approval.
Will the regulators' clearance of cooperation between foreign financial institutions and banks in the insurance sector accelerate the pace of domestic commercial banks like CCB entering the insurance industry? On this matter, insiders from both CCB and Ping An Insurance expressed positive views to The China Economic Weekly. The "leniency" shown by regulators towards foreign financial institutions regarding mixed-operations will, in a certain sense, pave the way for the cooperation between CCB and Ping An Insurance.
Cooperation has gradually deepened
On August 28 of this year, Shenzhen Commercial Bank, under the Ping An Insurance Group, merged with Ping An Bank to form Shenzhen Ping An Bank Co., Ltd., officially making banking business one of the three major business pillars of Ping An Insurance. Some industry insiders believe that the essence of Ping An Insurance's strategic goal of "one customer, multiple products" is mixed-operations, meaning one customer can simultaneously enjoy Ping An's insurance, banking, and investment services.
In fact, as early as a year and a half ago, due to its "shortcomings" in banking operations but still wanting to be a "financial holding group," Ping An Insurance had already started piloting cooperation with CCB.
In early 2006, Ping An Life Insurance's Shenzhen branch and CCB's Shenzhen branch signed the "Insurance Wealth Management Advisor Cooperation Agreement," launching the first insurance wealth management model between mainland banks and insurance companies. This service is not only fully implemented in over 20 branches of CCB Shenzhen Branch but will also gradually expand nationwide.
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