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Top executives of New York Life, the largest mutual life insurance company in the United States, said they have enough capital to expand its joint venture insurer in China to as many cities as possible and as quickly as possible.
According to Sy Sternberg, chairman and chief executive officer of New York Life, Haier New York Life Insurance, in which his company has a 50 per cent stake, plans to expand to three new cities each year when China lifts the geographic restrictions for foreign insurers next year.
"I would also expect that in two years, we'll also bring more new products into the market, including pension products," he said.
Set up at the end of 2002, the joint venture between New York Life and the Haier Group, China's largest electric consumer appliances maker, has enjoyed rapid growth in the highly competitive Shanghai market. Last year, it achieved 80 million yuan (US$9.67 million) in sales, making it one of the top performing foreign insurers in Shanghai in 2003.
Now the company is waiting for a licence to expand into Chengdu, the capital city of Southwest China's Sichuan Province, which has a population of more than 10 million.
"Hopefully we'll have the licence within the next several months," Sternberg said.
The expected branch in Chengdu is part of New York Life's commitment to former Premier Zhu Rongji. In a meeting, Sternberg promised the premier they would invest more in Western China.
Sternberg said he was also interested in looking at the competition in China. "One thing I like about Chengdu is that we'll be one of the first foreign companies there," he said.
Gary Benanav, chairman and chief executive officer of New York Life International, which is in charge of New York Life's business outside the US, said they will not only focus on coastal cities, but also go to the West. "Over time, you will see us all over China," said Benanav.
Sternberg said the operation in Chengdu will determine where the company will go in terms of both the population and economies of major cities such as Beijing and Guangzhou. "Our long-term plan is to expand insurance operations throughout major cities in China," he added.
New York Life has high expectations for China's pension market.
"First we want to establish ourselves as the most respected life insurance company, and once we are well established we'll move into the pension business," said Benanav.
He said China's ageing population will need products and services that will look after them in their twilight years, especially as the old support system that traditionally looks after the elderly and children disappears.
"The future of the pension market will depend on what the government wants, what regulations are proposed and what the desires of Chinese consumers are," he said.
In the next two years, New York Life's primary focus is on building a life insurance company, according to Benanav.
"When the strategy and market for pension funds develop more clearly, we know we have the expertise to bring in here and very quickly develop the pension business," he said.
Sternberg called the joint venture with Haier a complimentary marriage of New York Life's insurance brand and Haier's well-respected brand.
"So the strategy has been and continues to marry the insurance expertise of New York Life with the consumer and Chinese culture expertise of Haier," he added.
(China Daily August 24, 2004)
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