Photo taken on April 9, 2020 shows the Lujiazui area in east China's Shanghai. (Xinhua/Chen Fei)
BEIJING, Oct. 18(Xinhua) -- Many foreign insurance companies have accelerated their investment in the Chinese insurance market by such means as equity investment and capital increase since the start of this year, Beijing Business Today reported on October 16.
For example, the German insurance giant Allianz SE recently acquired 3.33 percent stake in Allianz Jingdong General Insurance Company Ltd (Allianz JD), a joint venture set up by Allianz SE and the Chinese e-commerce giant JD.com, at the price of 57.5 million yuan in an auction. After completion of equity transfer procedures, Allianz SE's shareholding in Allianz JD will rise from 50 percent to 53.33 percent.
Likewise, in July, the U.S.-based Prudential International Insurance Holdings, Ltd. acquired 10 percent stake in Qianhai Reinsurance Co., Ltd. headquartered in the Qianhai Free Trade Zone of south China's Shenzhen through auction.
Besides acquiring equity, increasing capital and establishing new branches are also ways adopted by foreign insurers to invest in the Chinese market.
For instance, the Shanghai branch of the German insurer Hannover Re announced on September 5 to increase its registered capital by 1.525 billion yuan, which brought the total registered capital to 7.25 billion yuan.
In August, the Spanish reinsurer Mapfre Re was approved by the China Banking and Insurance Regulatory Commission (CBIRC) to set up a subsidiary in Beijing.
The share of foreign insurers in the Chinese insurance market has increased from 3.5 percent in 2012 to 7.8 percent in 2021. Foreign insurers even hold 20 percent of market share in cities like Beijing and Shanghai, Yu Hua, head of Insurance Association of China, said last month at the China Insurance Industry High-quality Development Forum.
One factor behind foreign insurance companies' moves to expand their presence in China is policy support, according to industry insiders.
In recent years, Chinese regulators have rolled out a series of measures, like gradually removing restrictions on foreign investment and lowering threshold for foreign investment access, to open China's insurance sector to the world.
Previously, foreign insurers, as sole investors, could only operate property insurance companies in China and were not permitted to establish insurance groups or life insurance companies in the country. Currently, the restriction has been lifted. Foreign insurers are allowed to engage in businesses of almost the same scope as Chinese peers, according to CBIRC.
The provisions on the administration of insurance asset management companies taking effect from September 1 removed the upper limit on the proportion of stake held by foreign insurers in insurance asset management companies.
A notice on opening China's insurance intermediary market unveiled in last December lifted the access restriction on foreign-funded insurance brokers, giving greenlight to foreign insurance groups and insurance brokers invested by foreign-funded insurance groups operating in China to run relevant insurance intermediary businesses. (Edited by Su Dan with Xinhua Silk Road, sudan@xinhua.org)
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