BEIJING, Sept. 4 (Xinhua) -- As China further opens up its financial industry, foreign insurance companies are entering and expanding business in different ways in the Chinese market.
-- Market share needs to be improved
According to the data for the first half of this year, the market share of foreign life insurance companies has seen a slight increase. From January to June, the insurance premium income of foreign life insurance companies reached 108.19 billion yuan, accounting for 6.62 percent of the total premium income of life insurance companies in China, 0.18 percentage points higher over the same period of the previous year. Among them, the market share of foreign small and micro life insurance companies reached 2.61 percent, 0.22 percentage points higher over same period of the previous year.
In contrast, the market share of foreign property insurance companies has slightly decreased. The insurance premium income of foreign property insurance companies totaled 10.76 billion yuan from January to June, accounting for 1.79 percent of the total income of all property insurance companies in China, a year-on-year decrease of 0.1 percentage point. Moreover, it is reported that many chief executive officers have recently resigned from the Chinese subsidiaries of foreign property insurance companies.
In the view of professionals of the foreign property insurance companies, the decreased market share is affected by both external and internal factors. On the one hand, as the property insurance market in China faces intense competition and price wars, especially in automobile insurance, some foreign property insurance companies have to shut down their business. On the other hand, the lack of localized business strategy also hinders their market share increase.
-- New opportunities to come
However, as China accelerates the further opening-up of its financial industry, new opportunities will be provided to the foreign insurance companies.
For foreign property insurance companies that have entered China, transformation is needed. An executive of a foreign property insurance subsidiary in China admitted that although the company would not enter the auto insurance market for now, it would increase the market share by strengthening accident and health insurance.
“Meanwhile, it will introduce the parent company's international technology to China as soon as possible and further improve customers’ experience, which has always been one of the strengths of the foreign property insurance companies,” said the executive.
For foreign insurance companies that have not yet entered China, they are accelerating their steps into the Chinese market.
Since it is not necessary to open a representative office for two years before setting up a branch office, Sirius International Insurance Group, a global reinsurance company headquartered in Bermuda, is applying for business operation in China.
And shortly after the announcement of relevant policies on further opening up the China's financial industry, FWD Life Insurance Company (Bermuda) Limited, a wholly owned subsidiary of FWD Group whose main shareholders include Swiss Re Group and Pacific Century Group (PCG), has submitted the application materials to China Banking and Insurance Regulatory Commission for the establishment of a life insurance company in the Chinese mainland.
Besides, many other foreign insurance and reinsurance companies have applied for establishing their subsidiaries in China and some of them are considering moving their Asia-Pacific headquarters to Shanghai. (By Tong Wei, tongwei@xinhua.org)
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