Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

Anbang Sales Rise 5x in June Despite China Insurance Crackdown

2016/07/25 by Michael Cole Leave a Comment

Wu Xiaohui Anbang

“And our latest product combines life insurance with an industry-leading yield, plus apparent exemption from many major regulations.”

Beijing-based Anbang Insurance, which failed in a $14 billion bid to buy Starwood Hotels and Resorts this year, continued to draw attention in China’s financial world this month after new figures showed that the company controlled by entrepreneur Wu Xiaohui nearly quintupled its premium income in June, compared to the same month last year.

Anbang thrust itself onto the world stage in late 2014 with its $1.95 billion acquisition of the Waldorf Astoria hotel, but more recently the 12-year-old insurer has been drawing attention for the rapid rise in its sales and the high-risk nature of some of the products it is marketing to retail investors in China.

Retail Investors Turn to Wealth Management for Yield

The China Insurance Regulatory Commission (CIRC), which regulates the insurance industry, has recently been warning insurers about selling short term insurance policies which double as wealth management products. Largely unable to invest beyond China’s borders, and faced with a state-run banking sector which pays less than 0.5 percent interest on savings accounts, Chinese individual investors now regularly turn to opaquely-structured high yield wealth management products as a source of investment return.

Despite new restrictions on sales of such hybrid insurance policies, however, Anbang has reportedly been marketing high yield products aggressively to help fund its overseas acquisition drive. Sales of what the industry calls “universal insurance,” which combine death benefits for policy-holders with short term investment yields, were the primary source of Anbang’s nearly five-fold increase in premium income in June, after its sales of high-yield hybrid policies jumped 16-fold this year.

Some of Anbang’s products “guarantee” a 4.58 percent yield on a two-year investment, according to a recent report in Caixin, while competitors are generally restricted to a offering a maximum 3.5 percent return unless they receive approval from the CIRC. Anbang also does not require downpayments on its wealth management policies, and the policy studied by Caixin had no penalty for early withdrawal.

Anbang’s revenue from sales of insurance products reaching RMB 34.1 billion ($5 billion) in June, according to the latest data from the CIRC.

Meanwhile a spokesman for the China Securities Regulatory Commission (CSRC), which regulates the country’s stock markets, on Friday publicly criticized Shenzhen’s Baoneng Group for its use of “high risk” financing in its drive to take over China Vanke, the country’s biggest developer.

Reports of Investigation Fail to Slow Anbang

The CIRC was said in May to have started an investigation of Anbang and the stability of its financing methods, but based on the company’s June results, that reported scrutiny has not stopped the insurer from building up its war chest for further acquisitions. Wu is married to a grand-daughter of former Chinese supreme rule Deng Xiaoping and is said to have benefitted from her family’s political connections during his meteoric rise.

Anbang’s high-yield-led sales reached RMB 228 billion in the first six months of this year, ranking behind state-owned giant China Life which brought in RMB 383 billion.

During March the CIRC outlawed sales of insurance policies with durations of less than one year, and restricted the sale of policies with durations of less than three years. Since that time many smaller insurers, including Baoneng subsidiary Foresea Life Insurance, saw their sales drop rapidly, with Foresea’s June premiums down 42 percent compared to the same month last year.

Related Stories

  • Anbang Insurance Said Exploring Sale of C$1B Vancouver Office ComplexAnbang Insurance Said Exploring Sale of C$1B Vancouver Office Complex
  • Sino-Ocean to Take Over Anbang China Real Estate Projects After Wu Xiaohui SentencedSino-Ocean to Take Over Anbang China Real Estate Projects After Wu Xiaohui Sentenced
  • Anbang’s Wu Xiaohui Sentenced to 18 Years in Prison, $1.6B in Assets ConfiscatedAnbang’s Wu Xiaohui Sentenced to 18 Years in Prison, $1.6B in Assets Confiscated
  • Chinese Government Seizes Control of Anbang as Boss Charged with FraudChinese Government Seizes Control of Anbang as Boss Charged with Fraud

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Finance Tagged With: Anbang Insurance, CIRC, CSRC, weekly-sp, Wu Xiaohui

Office Investment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Knight Frank 390-396 Pitt St

Get Mingtiandi Delivered

Florentia Village

MTD TV

Proptech Forum: Logistics Tech

Logistics Experts Reveal How Tech Is Reshaping Asia’s Distribution Centres

MTD TV Interview with Jeffrey Perlman of Warburg Pincus Now Online

More MTD TV Videos

Latest Stories

goodwin gaw

Gaw Capital Said Planning US SPAC and More Asia Real Estate Headlines

quayside hong kong

IWG Opens in the Quayside in Third Takeover of Hong Kong WeWork Location

JLL Alex Barnes

Hong Kong Office Vacancy Hits 9.3% as Deutsche Bank, AIA Surrender Space

Sponsored Features

Tony Horrell

Colliers’ Global Investor Sentiment Report Anticipates Up to 50% Surge in Investment in 2021 Sponsored Feature

Andrew-Slevin-John-Foord (4)

Insurtech to Help Address Underinsurance Across Asian Real Estate Assets in 2021 Sponsored Feature

CK Lau

Asia Pacific Logistics Sector: Increasingly Varied Sector Requires Multiple Approaches Sponsored Feature

More Sponsored Features>>

MTD-QR-Code-320

Top Stories

Link REIT Buying Half-Stake in Vanke Shanghai Mall for $429MLink REIT Buying Half-Stake in Vanke Shanghai Mall for $429M

Hines Ramps Up APAC Presence With New Hires in Japan, South KoreaHines Ramps Up APAC Presence With New Hires in Japan, South Korea

IWG Opens in the Quayside in Third Takeover of Hong Kong WeWork LocationIWG Opens in the Quayside in Third Takeover of Hong Kong WeWork Location


Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Newsletter Subscription
  • Terms of Use
  • Privacy
  • Advertise
  • Join the Mingtiandi Team