Chinese insurer Anbang plans flotation of life insurance unit

Anbang Insurance Group is in talks with banks to float its life insurance unit - despite its history of valuing its privacy - in order to obtain capital and expand the business.

Hong Kong is home to the biggest insurers, including China Life, Ping An and PICC, and is said to be preferred to New York as the preferred venue.

The firm is founded on a model set by founder Wu Xiaohui’s admiration for Warren Buffett, the Berkshire Hathaway chairman.

Bankers, who wish to remain anonymous, told the Financial Times talks were taking place but no decisions have been taken regarding the structure, listing venue or deal size. According to one of the sources cited, the company is waiting on banks to comment on these points.

Pitches for the initial public offering (IPO) are due by the end of the week and a decision by Anbang is expected in the next two weeks, according to the FT.

Over the last two years, the group has been on a global spending spree. It acquired New York’s Waldorf Astoria in 2014 for $2bn followed by Strategic Hotels&Resorts in 2016.

In June 2016, it also attempted a purchase of Fidelity & Guaranty in the US, but later reportedly desisted after US regulators asked for more information.

The DFS said Anbang had “failed to provide” information needed to process the application according to The Wall Street Journal.

The company also made a $14bn bid for Starwood Hotels and Resorts Worldwide in March 2016 which was then withdrawn after going toe-to-toe in a much-publicised bidding contest with Marriott International.

According to sources close to the deal, the sudden decision to back-out was due to plans by the Chinese insurance regulator to block the deal.

Some investment banks have reportedly declined to work with Anbang in the past, partly because of confusion over who actually owns it. Regulators and credit-rating firms have also been constrained by an inability to understand the company. In November, S&P Global Ratings said it suspended its ratings on one of Anbang’s other recent purchases, Vivat Verzekeringen, in the Netherlands, because it was “unable to secure sufficient information to accurately assess” its creditworthiness.

Nevertheless, China's insurance regulator however ranked Anbang’s life-insurance business 10th by premiums in the first half of 2016.

A listing in Hong Kong would secure the city’s reputation as the favoured international centre for mainland financial groups. The city is also preparing for the listing of Postal Savings Bank of China, which is worth of up to $10bn.