American International Group (AIG) and People’s Insurance Company (Group) of China (PICC) and PICC Life Insurance have signed a joint venture (JV) agreement to set up an agency distribution company in China.
The US insurer invested $500m in PICC in December 2012, and as part of this investment, PICC Life and AIG have agreed to form the JV agency distribution company.
AIG and PICC Life will own 24.9% and 75.1% stake, respectively of the proposed distribution company, and board seats as well as management assignments will be determined based on shareholdings.
Commenting on the agreement, AIG president and CEO Robert H Benmosche said that the JV will offer life insurance and other financial products for Chinese consumers to enhance and protect their overall quality of life.
"This partnership builds on the longstanding relationship and history of cooperation between PICC and AIG to develop strategic business expansion opportunities," Benmosche added.
Both companies have agreed to start the operation of the JV by the first quarter of 2014, which is subject to concerned regulatory approvals.
Besides offering the existing PICC life products, PICC Property & Casualty (P&C) insurance products, AIG P&C products, the JV will distribute insurance products, including life and retirement insurance products that will be jointly developed by both firms.
Established in 1949, PICC operates as an insurance holding company and manages several subsidiary companies in China.
