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Samsung Air China Life Insurance Co, a 50-50 joint venture between China National Aviation Holding Company and Samsung Life Insurance Co, was set up yesterday.
With a registered capital of 200 million yuan (US$24.1 million), Samsung Air China Life Insurance (SACLI) will be the first Sino-South Korean joint venture of its kind in China.
"We have been in love with Samsung Life Insurance Co for three years," said Yao Weiting, chairman of SACLI. He is also the vice-president of China National Aviation Holding Company (CNAHC).
Although aviation is the core business of CNAHC, it is actively extending its business scope to financial areas such as securities, banking, trust and investment.
"The joint venture is really a win-win deal for us," Yao explained, "With over 50 years history and excellent performance, Air China has been a renowned brand in the world, which will help SLI tap into the market."
Air China also serves some 27 million people every year, and most of them are business travellers. "That represents a huge and valuable resource for SLI," added Yao.
"CNAHC's powerful marketing channel is really appealing to us," Pei Xi, an advisor to CEO of SACLI, said in an interview with China Daily. "And CNAHC will help ALI better adapt to the China market."
"Although some European and American insurance companies have entered China's life insurance market, a cultural similarity between China and South Korea will help us gain an upper hand in the competition," said Suh Eon-dong, chief executive officer (CEO) of SACLI.
He stressed that SACLI will mainly focus on protection-based insurance in the initial stage of the venture, accounting for 70 per cent of its business. "SLI once experienced South Korea's financial crisis and the fast-developing stage of insurance industry, which is quite similar with what's going on in China now," said Suh. "Therefore, we can offer some suggestions."
SACLI mainly targets medium- and high-end customers with monthly incomes of more than 5,000 yuan (US$602). As a striking feature, most of SACLI's insurance planners are women.
"Our survey shows that women are easier to get along with and have a stronger sense of family responsibility," Suh explained, "And our company's insurance planners are all women in South Korea."
If the business in Beijing is successful, SACLI will extend its branch to other cities.
"We will increase our investment within two years," Wang Chen, vice president of SACLI, told China Daily in a sidelines interview. "And we will expand our business to other cities where the major resources of CNAHC or SLI lie."
China's insurance industry has been growing quickly in recent years on the back of robust economic growth and rising awareness of risk protection among local residents.
Premium growth averaged an impressive annual 30 per cent over the past two decades. The huge potential of the market has attracted a growing number of foreign insurers, who are seeing their market share grow rapidly in wealthier cities such as Beijing and Shanghai.
The liberalization of the local market, driven by China's World Trade Organization commitments, is propelling growth even further.
(China Daily July 7, 2005)
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