Shanghai's insurance authority aims to attract more brand-name foreign insurers by creating a more favorable environment in order to improve both the market structure and the technology used.

Shanghai now has 19 foreign insurers which took up 15 percent of the market share in 2004, two percentage points higher than a year before and 13 percentage points higher than the national average.

Insurance companies in Shanghai collected 30.71 billion yuan (US$3.71 billion) of premiums last year, seeing a year-on-year growth of 5.86 percent.

"As the city is working hard to construct itself into an international financial center with the support of the central government, the inflow of foreign players into the market is a trend and a necessity," said Sun Guodong, head of the Shanghai Bureau of the China Insurance Regulatory Commission at an annual conference held on Wednesday.

He did not go into detail on the measures to be taken in this regard, but said as foreign insurers can come to the market freely due to China's commitment to the World Trade Organization, more will set up shop in Shanghai.

In 2004, 55 insurance companies, both domestic and overseas, were operating in the city and "a number of companies will come in this year," according to Sun. But he did not reveal any names of the companies.

"Foreign insurance companies practicing in Shanghai, or even in the country, will fully tap their advantages and work out more characteristic products," said Xu Wenhu, professor and director of the Insurance Institute of Fudan University.

Xu pointed out China's insurance market is still in its infancy, as is the market in Shanghai. There is a lot more work to do such as promoting the concept of risk-prevention among the public and urging insurance companies to invest more in helping the public prevent disasters.

Shanghai is home to the first foreign insurer operating in China -- the American International Assurance and the country's first Sino-foreign joint venture insurance company, Manulife-Sinochem Life Insurance Co, which is between the Canada underwriter and the Chinese conglomerate.

As the authorities ease restrictions on foreign insurers' business operations, foreign-funded insurance companies now can also sell policies in places neighboring Shanghai.

(China Daily January 29, 2005)