PICC Life Insurance Company, a joint venture between PICC
Holding Company and three foreign investors, was launched on
Friday, a new business that is part of PICC's efforts to become a
major insurer.
With registered capital of 1 billion yuan (US$123 million), the
Beijing-based insurer offers life insurance, health insurance,
accident insurance and reinsurance services.
Tang Yunxiang, general manager of PICC Holding Company, has
become president and CEO of PICC Life.
According to PICC Life's business plan, the company aims to set
up its Beijing branch by the end of this year and expand its
business into five provinces and 15 cities by the end of next
year.
PICC Holding is involved in almost all insurance sectors,
including property and casualty insurance, life insurance, health
insurance, assets management and the insurance broking business.
However, there are still problems about how to coordinate
subsidiary companies under PICC Holding.
Wang Guojun, an insurance professor at the University of
International Business and Economics (UIBE), said the
competitiveness of each subsidiary largely depends on the brand
name PICC and its marketing network, as well as the customer base.
"Therefore, how to integrate these advantages is quite important
for the development of these subsidiaries," Wang told China
Daily.
One of PICC Life's top managers disclosed that the company has
divided its target customers into six categories, with the focus on
middle-aged people with stable incomes, young people with an
average-level income and people close to retirement.
In terms of its sales methods, PICC Life will take advantage of
the strong marketing network run by PICC Property and Casualty
Company. PICC Life will also provide group insurance services to
PICC Property's customers and its employees.
The participation of three foreign investors will provide
management and technological support and give the firm extra
confidence, it said.
Sumitomo Life Insurance Company, one of Japan's leading
insurers, has taken a 29 percent stake in PICC Life. Asia Financial
Holdings and Bangkok Bank, both powerful financial enterprises in
Asia, will take 10 percent each.
Differing from some foreign insurers who seem willing to link up
with non-insurance companies to set up joint ventures, Sumitomo
Life believes that an insurer with a similar philosophy and rich
experience is a better choice.
"PICC and Sumitomo enjoy many similarities in management
philosophy and development history, thus making it easier to reach
a consensus," Yasuo Yoshino, chairmen of Sumitomo Life, told
China Daily. "That is why we came together at last."
As the largest foreign shareholder in PICC Life, Sumitomo will
mainly provide management and technological support.
"With a combination of PICC's household brand name and
Sumitomo's business know-how, we are confident that we have the
ability to make the new company become one of the leading life
insurers in the near future," Yoshino added.
According to Chen Youqing, chairmen of Asia Financial Holdings,
their investment is a perfect platform to enter an insurance sector
that has grown by an average of 30 percent annually over the past
two decades.
(China Daily November 19, 2005)