Private equity enters the insurance market

August 22, 2013 | BY

clpstaff

A new Circular from the CIRC finally opens up the insurance market to private equity investments. Firms need to consider the eligibility requirements and understand that they cannot interfere in the daily management of insurance companies

Circular on Issues Relevant to the Regulation of the Investment and Acquisition of Equity Stakes in Insurance Companies by Limited Equity Investment Partnerships 中国保监会关于规范有限合伙式股权投资企业投资入股保险公司有关问题的通知

The Circular is a response to the Implementing Opinions on Encouraging and Supporting the Healthy Development of Private Investment (中国保监会关于鼓励和支持民间投资健康发展的实施意见) released by the CIRC in June last year.

The Circular expands on the Opinion and facilitates private equity (PE) investors to enter the insurance market. Investing in this market requires large capital with extended investment time frames, which means that private investors have been rare in the past.

Typically, foreign financial institutions and PRC investors from other financial sectors like banks dominated investments in the insurance market. However, as initial public offerings (IPOs) and M&A in the insurance market have become more active, it is attracting private investors.

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