|Insurance sector opens doors(12/19/01)|
A new round of massive insurance licence grants last week has helped enhance foreign insurance companies' confidence in China's commitment to the World Trade Organization (WTO), and encouraged them to proceed with their global strategies.
Last Tuesday, right after China's WTO entry, the China Insurance Regulatory Commission (CIRC), the market watchdog, issued five licences to five insurance companies from the United States, Japan and Canada.
Prior to this, US-based American International Assurance, who already has three fully owned life insurance companies in China, was given approval from the CIRC to set up another four life insurance operations.
And Canada's Sun Life, which was licensed by the CIRC to launch operation in 1999, got approval to establish their life insurance venture in Tianjin.
"I felt elated on receiving the licence," said William Toppeta, international business president with US insurer Metlife, one of the lucky five.
After six years of anxious waiting, the company is finally in a position to tap the fertile China market, "the most important step in Metlife's global strategy," said Toppeta.
He was echoed by Sy Sternberg, chief executive officer with New York Life, who said the newly obtained licence in China is a major step in solidifying New York Life's presence as a global leader in life insurance and follows on the company's recent expansion into important markets such as Mexico and India.
"We are gratified by this decision. It is further evidence of China's commitment to open its financial service industry," he said.
Officials with some European insurance companies also expressed their interest in further market liberalization.
"The US, Canadian and Japanese insurers deserve the licences after so many years' effort. Hopefully it will be easier for us to get licences in the future," said a chief international business officer with a European insurer.
Industry experts said the new licences were a welcome fanfare to foreign insurers because, with the world economy entering recession, multinational insurance groups are eager to find new markets to maintain growth.
"It is very clear to me that China is the market with the greatest potential in the world," said Metlife's Toppeta. "We are concerned with the future and China is the future."
Metlife officials said their long-term goal is to offer their financial services including life, health and real estate products all over China.
Toppeta said there still exists much market potentials in China, including real estate mortgage insurance and old age insurance, and Metlife is dedicated to educating Chinese people about the advantages of their products.
Both Metlife and New York Life are concerned with developing a large agent force in China to promote their products.
Despite their joy and ambition, industry insiders said these licensed companies still face a long journey in establishing their operations in China, with many uncertainties, such as partner and location choices, ahead.
About the licensed insurers
Among the licences issued last Tuesday, US-based Metlife and New York Life, two leading international life insurance companies, and Japan's Nippon Life Insurance, received operating licences for the first time.
Japan's non-life insurer Tokyo Marine and Fire, and Canada's Manulife, who have already set up operations in China, were licensed to set up a new operation each.
American International Assurance may be the most privileged foreign insurer in China, who will possess seven fully owned life insurance companies after the launch of its four newly approved operations in Beijing, Dongguan, Suzhou and Jiangmen. Already, it has been operating life insurance companies in Shanghai, Guangzhou and Shenzhen.