Pressure is building on Anbang Insurance Group Co as Chinese banks distance themselves from the owner of New York's Waldorf Astoria hotel amid a wide-ranging government probe that landed chairman Wu Xiaohui in police custody.
Chinese authorities have asked lenders to suspend some business dealings with the insurer, according to a person with knowledge of the matter. At least six large banks have stopped selling Anbang policies at their branch networks, with some taking action before the government notice.
The directive strikes at the heart of Anbang's business model and raises questions about how much China will tighten the screws on an insurer with US$294 billion (HK$2.29 trillion) of assets and more than 30,000 employees.
Anbang's life unit distributes almost 90 percent of its products through banks, collecting premiums that Wu has used to snap up global assets from US hotels to a Belgian lender and a South Korean insurer.
"It's like having your legs broken," said Grace Zhou, a Hong Kong-based analyst at ICBC International, referring to the reported block on Anbang's bank channels. "It's their main source of revenue."
The company rose from obscurity to global prominence in just over a decade, helped by government-linked backers and sales of investment-like products that promised big returns to savers.