China's Insurance Market In 'Historic Phase'
NU Online News Service, July 7, 1:53 p.m. EDT?The opening of China's insurance market to foreign competition is entering a "new historic phase," according to a Chinese press report quoting a senior official from China's insurance regulation committee.
Today's People's Daily, China's official daily newspaper, reported that Insurance Regulatory Commission vice president Kemu Li said his commission has approved more foreign insurers to operate in China in the first half of 2003 and that the commission will "quicken the pace of reform" during the rest of the year.
The newspaper said China's growing insurance market offers bright prospects for foreign companies. People's Daily noted, for instance, that China's overall insurance industry has been posting a 10-to-15 percent revenue growth for the past several years, with the total premium income expected to pass $20 billion in 2003.
With less than two-percent share of China's overall economy, the insurance industry still has much room to grow, the newspapers said..
Currently, foreign non-life insurers can make a request to establish branches or joint ventures in limited areas, including Shanghai, Guangzhou and Shenzhen. This geographic restriction, however, is expected to be eased in the next two-to-three years.
There are a number of foreign insurers that have already been approved by the Chinese government to operate in the country. They include: the U.K-based Royal & Sun Alliance Insurance Group; Cologne, Germany-based Gerling; and Allianz AG in Munich, Germany. Foreign insurers currently make up about one percent of China's overall insurance market.
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