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Ping An Insurance (Group) Company of China, Ltd expects China's rapidly-growing pensions market to contribute one-third of its life insurance premiums in the long run, and anticipates a market position as strong as the one it has in the entire life insurance sector.
Louis Cheung, chief operating officer of Ping An, China's second largest life insurer and third largest property insurer, said on Friday preparations for its pensions subsidiary are currently in the final stages, and will hopefully pass final regulatory examinations in the near term.
"We have been actively preparing over the past few months, and it will be (launched) soon," he told reporters on the sidelines of the 2004 China Ping An Financial Forum and an award ceremony for its Elite College Students scholarship program.
Ping An was one of the first two Chinese insurers to win regulatory approval to set up specialized pension companies shortly after the nation's first regulations on business annuities came into effect in May.
The regulations allow such pension companies to serve as custodians, asset managers and bookkeepers of annuities that Chinese enterprises are being encouraged to build up. The annuities are expected to grow to 100 billion yuan (US$12 billion) in a few years.
Cheung said Ping An has high hopes in the pensions market, and targets a considerable market share despite the expected grueling competition. The annuities market will be open to foreign insurers at the end of this year as part of China's World Trade Organization membership commitments.
"In the long run, we hope the pensions business will account for one-third of our total life insurance premiums," the executive said. "For market share, we want it to be at least no lower than what we have in life insurance," Cheung added.
Ping An held a 16.93 per cent stake in the Chinese mainland life insurance market in the first seven months of this year, the second largest behind China Life.
Cheung said the authorities' recent policy loosening that allowed qualified domestic insurers to invest their foreign exchange assets overseas will help boost the company's investment returns.
(China Daily September 18, 2004)
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