BEIJING, Nov. 21 -- Overseas-founded life insurers have been gearing up efforts to increase their presence on China's mainland since the watchdog widened their business scope late last year.
The stepped-up moves, industry experts said, may lead to stiffer competition and prompt domestic companies to beef up product innovation and strengthen sales networks.
"The group insurance market will gradually come into the spotlight," said Zhou Jie, a sales manager at American International Assurance. "Foreign players usually have good contacts with multinational enterprises, which may help them sell policies."
The mainland last December started to allow overseas-funded insurers to provide local citizens with policies for health insurance, group insurance and pension insurance. The government also permitted foreign participants to operate in all mainland cities.
Italy's Assicurazioni Generali SpA, which sold a group policy totaling 20 billion yuan (US$2.47 billion) on the mainland early this year, opened its Shanghai branch this month and plans to market policies to the city-based Fortune 500 companies.
Haier New York Life Insurance Co, New York Life International LLC's local venture, is finalizing a major deal for group insurance with its Chinese partner Haier Group, company officials said last month.
"It will probably become a trend that joint-venture insurers seek polices from their Chinese shareholders, which often have big work forces," Zhou said. "That could be a threat to local players, requiring them to upgrade services to win clients."
Growth in the mainland life insurance industry began to slow last year as insurers sought to sell long-term products rather than short-term investment-linked policies to boost profit. Overseas firms, however, have been gaining a foothold through rapid expansion.
Domestic and overseas-funded insurers generated 303 billion yuan in life premiums in the first 10 months of the year, up from 270 billion yuan a year earlier, the China Insurance Regulatory Commission said last week.
The market share for Manulife Financial Corp, Prudential Plc and other overseas life insurers was 10 percent at the end of October, up from 2.4 percent a year ago.
(Source: Shanghai Daily/Photo: Baidu)