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Good returns drive CITIC expansion
Sino-British insurer CITIC Prudential Life Insurance Co Ltd is expecting to accelerate its business growth in China after good returns over the past few years. "We have enjoyed growth rates of more than 50 per cent annually in recent years," Chief Executive Officer K H Chia said, hoping a broader business scope and more branches will boost the firms already strong presence in China. "This year, that figure will be a minimum," he said. Chia's four-year old company, a 50-50 joint venture between British insurance giant Prudential and local financial conglomerate CITIC Group, is one of the fastest-growing joint venture insurers operating in China. In Guangzhou, South China's Guangdong Province, where it is headquartered, CITIC Prudential now ranks third or fourth in terms of first-year premiums, following hot on the heels of local giants China Life and Ping An Insurance with a strong 14 per cent market share of new business. The company has also elbowed its way into the ranks of the top six insurers in the highly competitive Beijing market after it set up a branch in August, 2003, raking in an average of 10 million yuan (US$1.2 million) in annual premiums each month with its 2,500-strong sales force. "We are very satisfied with the performance," Chia said. Just over three months ago, CITIC Prudential set up its second branch in Suzhou of East China's Jiangsu Province, a second tier city in the wealthy Yangtze River Delta. So far, it has built up an insurance-agent force of nearly 400, which the chief executive said was also satisfactory. The company's prospects are shining ever brighter as China lifted all restrictions on business scope and location for foreign insurers early last month as part of its World Trade Organization commitments, opening such key business lines as group insurance, health insurance and annuities. Chia said his company has applied to broaden its scope to include the new areas, and expects no major difficulty obtaining regulatory approval since the China Insurance Regulatory Commission (CIRC) is "faithfully committed" to the opening up. "Our new products and new systems are all in place," he said. "And this will surely boost our business growth." What also helps, the official said, is the gradual enlargement of the company's nationwide network, which is expected to speed up given the removal of geographical restrictions. The company is preparing to open a third branch in the first half of this year in Shanghai, China's financial hub. Regulatory approval was given last November. "Shanghai will be no problem, but we hope there can be more (branches)," Chia said. He said he is also interested in expanding into China's less-developed central and western regions, particularly Wuhan of Central China's Hubei Province and Chengdu, Southwest China's Sichuan Province and neighouring Chongqing Municipality. "Competition is not as intense there, but economic growth is bound to be strong," he said. Chia attributed his company's fast growth to such factors as a powerful system of insurance agents, efficient training programmes and innovations in product development and services, as well as the strong brands of its shareholders and their support. China is now the fastest-growing area of Prudential's Asian operations, and accounted for 48 per cent of new business profit for the company in 2003, compared to only 14 per cent four years earlier, reports said. "Our shareholders are quite satisfied (with the joint venture's performance)," Chia said. |
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