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More and more Shanghai-based foreign insurance companies are fanning out across China.
As one of the first cities to open up to international insurance companies, Shanghai now boasts 13.6 percent of the foreign market share. By the end of 2001, Shanghai had 14 foreign insurance companies altogether, with property and life insurance each taking a half share in the market. By the end of 2002 three to four more companies will be added to the count.
With 16 million residents and a GDP worth 4,500 US dollars per capita, Shanghai is attractive to foreign groups, including AIG, AXA and Allianze.
China will gradually lift bans on regional control for foreign insurance companies according to its WTO commitment. Besides Shanghai and Guangzhou, Dalian, Shenzhen and Foshan will be added on the list. In two years, 10 more cities, including Beijing, Chongqing and Chengdu will join them. In three years, there will be no regional limitation.
"The Chinese insurance marketing is still burgeoning and its great potential is clear. AXA plans to start from Shanghai and develop into wider areas," said Claude Bebear, chairman of AXA.
AIA Beijing branch opened at the beginning of this month. It is busy preparing for the grand opening of branches in Suzhou, Dongguan and Jiangmen.
"We are satisfied with our achievement here. What we have learned in Shanghai will help us to explore more of the Chinese market," said Xu Zhengguang, general manager of AIA Shanghai branch.
New York Life did not get permission to come to China until the end of last year. With the hope of a network throughout China, it chose to cooperate with China's Haier Group, which is famous for electrical home appliances.
Canada's Sunlife Insurance and China's Everbright Group set up a joint venture in Tianjin, close to Beijing. This marks an important step for Sunlife and will prepare it for taking a share of the capital's market.
In May, China's urban and rural individual savings deposits surpassed 8 trillion yuan for the first time. Investment in insurance will become a new trend. Another survey showed 40 percent of the potential policy holders will choose to invest in foreign insurance companies.
Experts hold foreign insurance companies will expand from the Yangtze and Pearl rivers area to central and southwest China. As the strategy to develop China's western area is implemented, the purchasing power of west China will rise.
(People's Daily June 27, 2002)
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