Under the deal, Tokio Marine and its group firm Millea Asia Pte of Singapore, which handles insurance operations in Asia, will first invest five billion yen in the Chinese firm, said Kazushi Miya, Tokio Marine spokesman.

The amount is equivalent to a 24.9 percent stake, the maximum allowed for foreigners investing in a Chinese life insurer, he said.

In addition to the stake purchase, Tokio Marine will give 10 billion yen to Sino Life so that the Japanese insurer can second executives to participate in the management of Chinese insurance operations.

"Our current business portfolio focuses on Japan. We wanted to expand into overseas markets, especially in Asia where countries are seeing healthy economic growth," Miya said.

Tokio Marine and Sino Life are expected to sign the deal soon, Miya said, adding that the Japanese insurer is considering starting operating in China as early as this autumn.

China's life insurance market has grown sharply with revenue from insurance premiums surging 60 percent year-on-year to 3.3 trillion yen in 2002, according to an earlier report on the deal in the Nihon Keizai Shimbun economic daily.

SPACE.WIRE