* Targets China's rising insurance demand
* "On track" to sell insurance to 20 percent of clients
(Adds comments from HSBC Insurance head, details)
By Steve Slater
LONDON, June 9 (Reuters) - Europe's biggest bank, HSBC Holdings, has received regulatory approval to launch an insurance joint venture in China, as part of its drive to boost income from insurance.
HSBC and Beijing-based National Trust Ltd will each hold 50 percent of the new company, which will have a registered capital of 500 million yuan ($73 million), funded equally by both shareholders, HSBC said on Tuesday.
Named HSBC Life Insurance Co Ltd, it will open for business in the third quarter.
It is another move by HSBC to boost profits from life insurance and pensions business. Its insurance profits of $2.6 billion last year represented about 13 percent of group profits before goodwill charges.
In 2007, the bank said it wanted insurance to contribute 20 percent of profits, from about 10 percent at that time, but it is now aiming to get 20 percent of clients to buy insurance rather than a profit target.
"What we now say is we want one in five of the group's clients to have some form of insurance relationship," Clive Banister, head of insurance, told Reuters in an interview.
"We are on track to make progress in terms of penetration," he said, saying the profit target was too volatile and could be swung by outside factors.
The push will largely be driven by organic growth with some joint ventures, he said.
The new China venture will offer a range of life, pensions and medical insurance and employ both an agency sales force and bancassurance partnerships as distribution channels.
It aims to tap into an ageing population and rising demand for insurance products there. China insurance premiums represent between 1 percent and 3 percent of GDP, compared with 10 percent to 12 percent in OECD countries, Bannister estimated.
"There's little doubt that over time China will go from under 3 percent to somewhere around 10 to 12 percent, the only question is how long it will take to get there," he said.
"This is a country where there's a rapidly ageing population, a determination to use self-reliance and the recognition that there will be private provision from private companies," he said. (Editing by Andrew Macdonald) ($1 = 6.835 yuan)