Aon Says Its China License Is A Winner

This approval allows it more functions than Marsh, the subsidiary of New York-based financial and consulting services company Marsh and McLennan Companies. Marsh at present can only act as a consultant to foreign interests, not domestic clients.

According to Marsh, its China license is national in scope and the firm recently received permission from the China Insurance Regulatory Commission to establish resident staff offices in Shanghai and Guangzhou in addition to its existing office in Beijing.

Marsh said that it has had "a fully owned license in China" since 1993 "to provide risk management and insurance consulting services for foreign investment-related business as well as reinsurance broking to all risks."

Patrick G. Ryan, Aon's chairman and chief executive officer, told National Underwriter that what Aon can now do that Marsh cannot is to obtain insurance for clients, both domestic and international, throughout China. The broker will work with both domestic and foreign insurers to obtain coverage.

By law, Aon must partner with a domestic company before it can receive approval for the license. In Aon's case the partner is China National Cereals, Oils, & Foodstuffs Import & Export Corp., a government-owned food company, said Mr. Ryan.

He explained that the partnership is a good mix with a commercial entity that needs Aon's expertise, and allows the broker to take this next step in bringing more insurance and risk services to China.

"I think we have a very good partnership," said Mr. Ryan. "I think there is a strong mutual respect between the two companies. And the most important thing is that our services are very, very much needed."

Aon has had an interest in China through Bain Hogg, Ltd., which opened an office in Beijing in 1986. Aon acquired Bain Hogg in 1996.

Mr. Ryan said Aon does not need to build a clientele base in China because it has many Chicago-based clients in China waiting to expand business with the broker.

Bernard Fung, chairman and chief executive officer of Aon Asia, in Hong Kong, said Aon's success in receiving the license has to do with the broker's long-term presence in the country and the desire of the Chinese people to deal with a leader in the industry. He said Aon has also worked very hard to demonstrate it was a committed partner to the process.

"We have been a very good citizen over there and we have helped them in many ways," said Mr. Ryan.