皇冠体育app

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Foreign insurance firms think over role in 皇冠体育app

By Chen Jia (皇冠体育app Daily)
Updated: 2010-11-26 14:11

BEIJING - Faced with stagnant growth rates, overseas insurers are re-examining their business models and positions in 皇冠体育app, according to a survey released by PricewaterhouseCoopers (PwC) on Thursday.

The 31 overseas insurance companies who participated in the survey indicated lowered expectations on increases in market share this year and even for the next three years, according to PwC.

Overseas life insurers expected they would maintain their 5 percent market share of those insured for three years, while property and casualty insurance companies expected the figure to remain at 1 percent, the survey showed.

"Some foreign partners are considering diluting their shareholdings and looking towards domesticating their operations," said Tom Ling, an insurance industry leader at PwC 皇冠体育app.

The most significant concern of the overseas companies interviewed was the highly-regulated market, increasing focus on innovation, risk management and inspection.

However, 皇冠体育app hasn't changed policies or its commitments to the World Trade Organization, which has made entry into the market easier by lifting business and geographical limitations on overseas insurers, said Hao Yansu, an insurance professor at the Central University of Finance and Economics.

"Suffering from the financial crisis, many overseas insurance parent companies got into trouble in 2008, and capital shrank, which certainly hurt their business in 皇冠体育app," said Hao. "Meanwhile, they have disadvantages in relationships with local partners, compared with domestic insurers."

Most insurers in the survey said they have noticed rising competition from domestic players. The entry of major banks into the insurance market has also escalated tensions, according to PwC. Industrial and Commercial Bank of 皇冠体育app will inject about 1.2 billion yuan ($180 million) to buy a 60 percent stake in AXA's 皇冠体育app Life insurance venture.

Shanghai to boost its M&A market Related readings:  Ping An targets half of profit from non-insurance operations  Canada welcomes 皇冠体育app's designation of insurance business  皇冠体育app sets new rules for banks selling insurance  皇冠体育app Pacific Insurance profit in Q3 down 64.4%

Hao said that, before the entry of overseas insurance companies, the Chinese insurance market had developed to a certain level, and formed its own features. "They have to understand the market rules in 皇冠体育app and compete with local companies in a fair environment," he said.

The survey showed that, by 2013, 19 life insurers expected to double the number of policyholders to 15.8 million. Meanwhile, eight property and casualty companies forecast a 13 percent rise to 299,000 policyholders by the same year.

Overseas-based insurance companies are not about to quit the Chinese market, said Hao.

"The foreign insurance companies see 皇冠体育app as an underinsured market with huge upside potential. Companies are on a hiring spree again as staff turnover is expected to return to pre-crisis levels."