China opens ins. industry to 100% foreign ownership in 2020
Thursday, 01 02 2020, Category: Insurance and Reinsurance, Country: China
To kick off the new year, foreign insurers can apply to set up 100%-owned units offering life insurance, a segment that accounts for three-quarters of the Chinese insurance market. Joint ventures -- of which ICBC-AXA Assurance Co. is the biggest -- brought in 8% of the sector’s total premiums last year, but have not been growing as fast as domestic competitors, according to Fitch Ratings.
Local firms dominate the market with their vast distribution networks and millions of agents, led by China Life Insurance Co. and Ping An Insurance (Group) Co. Among those poised to expand their presence is German insurer Allianz SE, which in 2018 got the green light to set up the first entirely foreign-owned insurance holding company.
Others including Cigna Corp. and Standard Life Aberdeen Plc. have indicated no intention to seek control, with Cigna calling its partnership with China Merchants Bank Co. a “winning formula.”
“There’s no best approach clearly in sight” for fully foreign-owned life insurers, said Jimi Zhou, a partner of consulting at PwC China. “The pie is big enough, but it depends on how you want to eat it.”