Starr International Company Inc, an insurance holding company run by former AIG chief Maurice Greenberg, has formed a strategic partnership with a Chinese insurer backed by the city government of Shanghai, the companies said on Monday.
The partnership, under which Starr has bought a 20 percent stake in state-controlled Dazhong Insurance, brought New York-based Starr back to its roots in China nearly a century after its creation.
Starr was invited by the Shanghai government to invest in the Chinese property and casualty insurer, Greenberg said at a signing ceremony in Shanghai on Monday.
“It was Mayor Han’s idea that Starr should invest in Dazhong. It was two years ago,” said Greenberg, referring to Han Zheng, Shanghai’s mayor who was also at the signing ceremony.
“I am confident about the future of Dazhong, we have good management,” Greenberg, 85, said.
Shanghai wants to develop its insurance industry as part of efforts to transform itself to become a global financial center in the next decade.
The insurance sector is also key to the Chinese city’s ambition of becoming an international shipping hub.
Insurance entrepreneur Cornelius Vander Starr founded C.V. Starr Co, the global investment holding company, in 1919 in Shanghai.
Greenberg, who joined C.V. Starr Co in 1960, is Chairman and CEO of the investment firm. He retired as Chairman and CEO of AIG in 2005, after serving as CEO since 1967.
In May, the China Insurance Regulatory Commission (CIRC) approved Starr’s acquisition of a 20 percent stake in Dazhong Insurance.
Dazhong Insurance was selling 286.5 million shares to Starr International, the CIRC said in a May 17 statement on its website. The transaction value was not revealed.
Dazhong Insurance, whose major shareholders are mainly state-owned enterprises, operates primarily in the Yangtze River Delta and has eight branches in Shanghai, Jiangsu, Zhejiang, Anhui, Suzhou, Ningbo, Qingdao and Fujian, the Chinese company said.
The Dazhong Insurance deal came just months after an earlier investment in a U.S.-listed Chinese company by Starr turned sour.
Starr Investments sued China Media Express Holdings, a television advertising operator on inter-city and airport express buses in China, saying it was fraudulently induced to invest about $13.5 million in the firm, according to court documents.