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China holds allure to overseas insurers
By Zhang Fengming |
May 31, 2011, Tuesday
|
Online Edition
Online Edition
Overseas insurers are still poised to tap China's rising insurance market despite a low penetration in the world's second largest economy, market watchers said.
Overseas insurers or companies owning a majority stake in a joint venture or wholly owned entity in China accounted for 4.4 percent of China's insurance industry in 2010.
"Major international insurers are keen to grow in emerging markets, especially India and China," said Adrian Liu, general manager of life insurance consulting for Towers Watson in China. "Investment is expected to continue to come to China with the country's evolving insurance need."
China opened up its insurance market under its World Trade Organization commitment. Overseas insurers can set up wholly-owned entities in the property and casualty insurance sector, while international insurers are limited to a 50 percent stake in life insurance joint ventures.
China's aging population and rising economy are attracting overseas insurers, including Allianz and AXA, to deepen their roots in China.
The Chinese still have a heavy reliance on government pension scheme, a recent HSBC survey said.
About 40 percent of Chinese mainland respondents said they relied on government for income after retirement, the highest reliance among 17 markets and above the global average of 16 percent.
Overseas insurers sniffed the opportunities for education and retirement products in China, which also encourages them to buy into domestic insurers and invest in western China.
Chen Wenhui, assistant chairman of the China Insurance Regulatory Commission, said the open-up plays a positive role in China insurance industry and regulators welcome more overseas insurers to offer health insurance and pension insurance for the country's aging population.
Overseas insurers or companies owning a majority stake in a joint venture or wholly owned entity in China accounted for 4.4 percent of China's insurance industry in 2010.
"Major international insurers are keen to grow in emerging markets, especially India and China," said Adrian Liu, general manager of life insurance consulting for Towers Watson in China. "Investment is expected to continue to come to China with the country's evolving insurance need."
China opened up its insurance market under its World Trade Organization commitment. Overseas insurers can set up wholly-owned entities in the property and casualty insurance sector, while international insurers are limited to a 50 percent stake in life insurance joint ventures.
China's aging population and rising economy are attracting overseas insurers, including Allianz and AXA, to deepen their roots in China.
The Chinese still have a heavy reliance on government pension scheme, a recent HSBC survey said.
About 40 percent of Chinese mainland respondents said they relied on government for income after retirement, the highest reliance among 17 markets and above the global average of 16 percent.
Overseas insurers sniffed the opportunities for education and retirement products in China, which also encourages them to buy into domestic insurers and invest in western China.
Chen Wenhui, assistant chairman of the China Insurance Regulatory Commission, said the open-up plays a positive role in China insurance industry and regulators welcome more overseas insurers to offer health insurance and pension insurance for the country's aging population.
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