Marsh Inc, the risk and consulting unit of the world's largest
insurance broker, yesterday won the first wholly owned license for
large-scale insurance brokering in China. The new license enables
it to operate without a local partner.
Although two other insurance giants, Aon and Willis, have
entered China, they both operate through joint ventures with local
partners.
According to Paul Wilkins, chief executive officer for Marsh's
Greater China Region, Marsh will expand to include insurance
brokerage for large-scale commercial risk and reinsurance in
addition to international marine, aviation, and transport
insurance.
"But we will not target at individual consumers," Wilkins told
China Daily. "Our great interest lies in areas such as
environmental issues, pandemic preparedness and product
liability."
As more and more Chinese enterprises expand overseas, more
sophisticated risk and insurance solutions are needed, he said.
For example, if a Chinese manufacturer wants to open a sales
office or float its shares in the United States it will have to
meet strict requirements on product and company liability
insurance, Wilkins explained.
"I believe there is still huge growth potential for China's
brokering business, although it may take some time," he added.
Industry statistics show that China's brokerage business
accounts for less than 2 percent of the insurance market, but that
figure in the United States is about 50 percent. Currently, China
has some 300 insurance brokers, growing from 2001, when there was
not a single one.
"We plan to expand our business to Chengdu in southwestern
China, but our application is still subject to regulatory
approval," Wilkins said.
In preparation for its license application, Marsh doubled its
staff over the past 12 months and actively recruited and trained
staff.
"But finding, developing and keeping best people is still the
major challenge facing us, especially in such a new sector," said
Wilkins.
"The entry of more foreign players will give a boost to the
overall insurance brokering market and enhance local players'
strengths with more fierce competition," said the manager of a
leading local insurance broker, who asked to remain anonymous.
Marsh is arranging insurance for the 2008 Beijing Olympics by
performing risk assessments. Its China operation contributed less
than 1 percent to its parent's $12 billion revenue in 2005.
(China Daily January 24, 2007)