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PICC Life Insurance Company, a joint venture between PICC Holding Company and three foreign investors, was launched on Friday, a new business that is part of PICC's efforts to become a major insurer.
With registered capital of 1 billion yuan (US$123 million), the Beijing-based insurer offers life insurance, health insurance, accident insurance and reinsurance services.
Tang Yunxiang, general manager of PICC Holding Company, has become president and CEO of PICC Life.
According to PICC Life's business plan, the company aims to set up its Beijing branch by the end of this year and expand its business into five provinces and 15 cities by the end of next year.
PICC Holding is involved in almost all insurance sectors, including property and casualty insurance, life insurance, health insurance, assets management and the insurance broking business. However, there are still problems about how to coordinate subsidiary companies under PICC Holding.
Wang Guojun, an insurance professor at the University of International Business and Economics in Beijing, said the competitiveness of each subsidiary largely depends on the brand name PICC and its marketing network, as well as the customer base. "Therefore, how to integrate these advantages is pretty important for the development of these subsidiaries," Wang told China Daily.
One of PICC Life's top managers disclosed that the company has divided its target customers into six categories, with the focus on middle-aged people with stable incomes, young people with an average-level income and people close to retirement.
In terms of its sales methods, PICC Life will take advantage of the strong marketing network run by PICC Property and Casualty Company. PICC Life will also provide group insurance services to PICC Property's customers and its employees.
The participation of three foreign investors will provide management and technological support and give the firm extra confidence, it said.
Sumitomo Life Insurance Company, one of Japan's leading insurers, has taken a 29 percent stake in PICC Life. Asia Financial Holdings and Bangkok Bank, both powerful financial enterprises in Asia, will take 10 percent each.
Differing from some foreign insurers who seem willing to link up with non-insurance companies to set up joint ventures, Sumitomo Life believes that an insurer with a similar philosophy and rich experience is a better choice.
"PICC and Sumitomo enjoy many similarities in management philosophy and development history, thus making it easier to reach a consensus," Yasuo Yoshino, chairmen of Sumitomo Life, told China Daily. "That is why we came together at last."
As the largest foreign shareholder in PICC Life, Sumitomo will mainly provide management and technological support.
"With a combination of PICC's household brand name and Sumitomo's business know-how, we are confident that we have the ability to make the new company become one of the leading life insurers in the near future," Yoshino added.
According to Chen Youqing, chairmen of Asia Financial Holdings, their investment is a perfect platform to enter an insurance sector that has grown by an average of 30 percent annually over the past two decades.
(China Daily November 21, 2005)
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