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JV eyes huge domestic insurance market
By Winny Wang |
September 16, 2011, Friday
|
Print Edition
Print Edition
CHINA'S biggest private conglomerate Fosun International has received regulatory approval to launch a life insurance joint venture with United States financial group Prudential Financial Inc to tap the 1 trillion yuan (US$157 billion) domestic market, the Chinese firm announced yesterday.
The venture, with a registered capital of 500 million yuan, may begin operations in the fourth quarter of 2012 in Shanghai. Both partners will own the venture equally.
"It's a long-term investment running a life insurance business as profit won't be generated in the short term, but I'm confident that our venture will earn money within the industry average of eight years," said Guo Guangchang, chairman of Fosun.
China's insurance market has grown strongly but the insurance penetration is less than half of the world's average and the China Insurance Regulatory Commission has urged insurers to expand their coverage and deepen their footprint in the market during the country's 2th Five Year Plan from 2011 to 2015.
Through this venture Prudential hopes to make a valuable contribution to Chinese society by providing life insurance protection, said Mark Grier, vice chairman of the insurer.
Life insurance premiums, including health and personal accident insurance, totaled 1.06 trillion yuan last year in China, the CIRC said.
So far, 28 foreign insurers, including HSBC Holdings, Axa and Allianz, have entered China's fast-growing but competitive life insurance market, which is dominated by domestic giants China Life Insurance and Ping An.
The venture, with a registered capital of 500 million yuan, may begin operations in the fourth quarter of 2012 in Shanghai. Both partners will own the venture equally.
"It's a long-term investment running a life insurance business as profit won't be generated in the short term, but I'm confident that our venture will earn money within the industry average of eight years," said Guo Guangchang, chairman of Fosun.
China's insurance market has grown strongly but the insurance penetration is less than half of the world's average and the China Insurance Regulatory Commission has urged insurers to expand their coverage and deepen their footprint in the market during the country's 2th Five Year Plan from 2011 to 2015.
Through this venture Prudential hopes to make a valuable contribution to Chinese society by providing life insurance protection, said Mark Grier, vice chairman of the insurer.
Life insurance premiums, including health and personal accident insurance, totaled 1.06 trillion yuan last year in China, the CIRC said.
So far, 28 foreign insurers, including HSBC Holdings, Axa and Allianz, have entered China's fast-growing but competitive life insurance market, which is dominated by domestic giants China Life Insurance and Ping An.
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