In a move that brings it yet closer to raising some of the capital it needs to pay back the huge amount of money it owes the U.S. taxpaper, humbled insurance firm AIG has inked a distribution deal with Industrial and Commercial Bank of China as it gets ready to stage an IPO for its Asian unit, AIA.
A source told the Financial Times, which first reported the story, that the deal will expand the partnership between AIA and ICBC. The AIA public offering is potentially worth $20 billion, money that AIG could use to pay back its near hundred billion dollar debt to the U.S. government.
Says the FT:
AIA, which is the only foreign company to own its Chinese operating licence outright, already has 17 smaller bancassurance arrangements in China that give it access to more than 1,000 bank branches, according to the most recently available financial data on the company.
It also has more than 25,000 sales agents in the country, which have helped it to build the leading position among foreign life assurers in China with a roughly 21 per cent share of business sold by foreigners. However, this amounts to just 1 per cent of China’s total life assurance market.
There’s gold in them there life assurances! Let’s hope it’s enough!