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Global financial services provider ING Group N V plans to expand its presence in the promising Chinese insurance market, particularly in new areas such as pensions, senior executives said yesterday.
The ING Capital Life Insurance Co Ltd, its 50-50 joint venture with Beijing Capital Group, is applying to open a branch in Qingdao, Shandong Province.
It has just won regulatory approval to set up a branch in Shenyang, Liaoning Province, which is also home to its head office in Dalian.
ING Capital Life was the first Sino-foreign joint venture to locate its head office in Northeast China, which includes Liaoning, Jilin and Heilongjiang provinces.
"That was a very important step forward," said Alexander Rinnooy Kan, chairman of ING Insurance Asia/Pacific, referring to the approval of Shenyang branch.
ING is the only foreign insurer with two life insurance licences in China. The other joint venture, Pacific Antai Life Insurance Co, which is based in Shanghai, has a branch in Guangzhou, Guangdong Province, and is considering opening a branch in the wealthy Jiangsu Province, which neighbours Shanghai.
While some analysts have expressed worries that potential competition between the two joint ventures may erode ING's efficiency, Rinnooy Kan said he views the situation as a "positive feature."
The structure, with one subsidiary focusing on the north part of China and the other focusing on the south, enables ING to expand quickly in the Chinese market, he said.
In the most recent development, ING Capital Life officially launched its first branch in the highly competitive Beijing market yesterday, where it has already hired 300 agents to sell 17 categories of life and health insurance products with protection, saving and profit features.
The company started sales of two bancassusrance products through the Bank of Beijing's 118-branch network last month, with plans to expand its product range to include uni-linked, traditional life insurance, short-term accident insurance and personal loan products. It won approval to start sales in Beijing in January.
"With the support of our Chinese shareholder - the Beijing Capital Group - and our bancassurance agreement with the Bank of Beijing, we hope to grow the business quickly and mirror the success we have seen in Dalian, where we are now number three in terms of new premium income," said Barry Tsai, general manager of ING Capital Life.
ING bought a 19.9 percent stake in the Bank of Beijing for 1.78 billion yuan (US$214 million) in March, which Rinnooy Kan said aimed to both utilize the bank's distribution channels for life insurance and to acquire experience in retail banking in the Chinese market.
But the official said ING currently has no plan to acquire equity stakes in any other Chinese bank, adding the company wants to concentrate on the investments already made.
"We are very happy with the partnership," he said.
Rinnooy Kan said ING also has a keen interest in setting up a pension firm in China, saying his company's rich experience in the sector worldwide will be very useful to the Chinese authorities in establishing a pensions system for the nation's ageing population.
Earlier media reports said the company is in talks with potential partners on entering the lucrative business, which was opened to foreign insurers near the end of last year as part of China's World Trade Organization commitments.
(China Daily June 7, 2005)
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