Foreign insurers show good form
( 2003-07-08 07:33) (China Daily)
Foreign insurance companies are, overall, faring well in the Chinese market and have played an active role in bringing international best practices to the local insurance industry, senior regulators said Monday.
In the first five months of the year, foreign insurance firms operating in China garnered 2.33 billion yuan (US$280 million) in premiums, up 37.5 per cent year-on-year, according to statistics from the China Insurance Regulatory Commission (CIRC).
In Shanghai Municipality in East China and Guangzhou, capital of South China's Guangdong Province, which are among the earliest cities to be opened to foreign capital and have the strongest presence of foreign insurance firms, their market shares grew to 10.1 per cent and 4.8 per cent respectively in the first five months, the commission said.
"Overall, foreign insurance companies are performing well and have played an active role in helping the Chinese insurance industry integrate with the international community,'' CIRC Vice-Chairman Li Kemu said yesterday during a conference with foreign insurers.
Li said his commission had been strictly implementing the nation's World Trade Organization commitments and had also opened up the cities of Beijing, Tianjin, Suzhou, Chongqing and Chengdu ahead of schedule.
So far, 36 foreign insurance firms have set up 57 operational entities in China, including 20 life insurers, 14 property insurers and 2 reinsurers.
The companies launched a string of new products, adopted efficient marketing systems and advanced technologies, which have "contributed to the improvement in the managerial expertise of the entire industry,'' Li said.
The official said most of the foreign insurers abide by the rules and refrained from undercutting each other, but he urged them to value equality when dealing with their Chinese partners, deepen their understanding of the Chinese market and step up innovation efforts.
Representatives from foreign insurance companies largely acknowledged the commission's work in opening up the market and improving industry regulation, but expressed a desire for faster market liberalization and urged the commission for greater freedom in investments.
Li said the commission is considering further broadening the investment scope for insurance firms, but did not elaborate.
The commission is also mulling over allowing foreign insurance firms to upgrade their Chinese subordinates to make branching easier and is reexamining registered capital requirements for the sake of easier business development and healthy growth.
The CIRC is currently drafting regulations on a spectrum of issues including insurance irregularities, the management of reinsurance firms and the use of guarantee funds.
Elsewhere, Li made it clear that the commission is scheduled to allow foreign property insurers into health insurance and injury insurance in December.
Prior to his remarks at the conference, representatives of foreign insurers had repeatedly asked the commission to specify the timing of the much-anticipated opening so they could prepare accordingly.
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