Foreign insurance companies develop quickly in China

Chinanews, Beijing, July 26 – With the gradual opening of China's insurance industry to the outside world, foreign insurance companies have made rapid development in expanding their business in China. In particular, their “investment linked insurance” business has gained rapid progress in China.
By the end of June, this year, about 45 foreign insurance companies from 15 countries and regions have set up more than 120 branch offices in China. During the first six months of the year, the original premium income made by foreign insurance companies reached 16.28 billion yuan. Foreign insurance companies now take up 4.38% of the market shares in China.
Chinese and foreign insurance companies have different advantages in domestic insurance market, said Yuan Li, chairman of the Chinese Insurance Regulatory Commission (CIRC) when attending a press conference held by CIRC on Tuesday. Chinese insurance companies focus their business on domestic market. They usually have a large sales network in the country and know more about domestic market. Consequently, they have a better marketing capability than foreign companies. In contrast, foreign insurance companies set strict risk management standards in the companies. Foreign insurance companies usually have a team of professional staff, an advantage that domestic insurance companies do not have. Domestic insurance companies should learn from foreign insurance companies in risk management, company governance, and product development. On the other hand, foreign insurance companies should try to understand Chinese insurance market better and quicken their localization process, Yuan said.
In the second Sino-US strategic economic dialogue, Chinese and US senior officials discussed about the topic of transforming the branch offices of foreign property insurance companies into subsidiary companies. CIRC is now checking the applications presented by foreign insurance companies, including US insurance companies, in transforming their branch offices into subsidiary companies. For those who have met related requirements, their applications will be approved before August 1, Yuan said.
Right now, CIRC hasn't decided whether to allow foreign insurance companies to set up a specific company to deal with the pension business in China, since there are no laws in China that deal with this issue. Once CIRC has made the final decision, it will announce its decision to the public as quickly as possible, Yuan added.