Monday, August 3, 2020

China wants to facilitate the entry of foreign life insurers

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China Anbang Insurance

The Chinese insurer’s headquarters in Beijing

(Photo: picture alliance / Zhou junxiang – Imaginechina)

Hong Kong According to insiders, China wants to open up more to foreign life insurers and facilitate mergers with local actors. The capital cushion of small and medium-sized Chinese life insurers should be strengthened, several people familiar with the matter told the Reuters news agency. They could also benefit from the know-how of international groups.

Foreign insurers have been represented in China for decades, but only have a small market share due to current property restrictions and a limited geographic presence. The rapidly growing market is considered attractive: with premium income of around $ 318 billion, China is the third largest insurance market in the world behind the USA and Japan, according to a study by the Swiss Re Institute.

Foreign life insurers with branches in China are currently only allowed to hold a 15 percent stake in local competitors. In the future, they should also be able to acquire a majority stake or a significant minority stake in a local insurer, the insiders said.

They should then be able to run this business separately from existing joint ventures or subsidiaries and may have more than one main business license. The new rules should be closed in the second half of the year, said the insiders. The Chinese regulator CBIRC declined to comment.

In November 2018, Allianz was the first group to receive a license for a fully foreign-owned insurance holding company in China. The Dax group plans to expand its range in the country through Allianz Insurance Holding, which is based in Shanghai. The people of Munich have been in the People’s Republic since the beginning of the 20th century and employ more than 2,000 people there. The British insurers Prudential and Aviva as well as the Canadian Sun Life Financial have been in China for decades.

More: Regulators argue about insurers’ dividend payments

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