Insurance News
- Foreign insurers aim to speed up growth rate
Date: 4-Sep-2007 Sources: (Shenzhen Daily)
FOREIGN insurance companies in China will likely grow at a faster pace in the next three years, despite a shortage of skilled staff and difficulties in expanding distribution channels, according to the results of a PricewaterhouseCoopers survey issued yesterday.
Most of the firms surveyed said foreign companies' share of the China insurance market will rise to 10 percent by 2010, while several said the figure could jump more than 20 percent.
Foreign companies now have a 6.3 percent share of the country's life insurance market, in terms of premium income, and a 1.2 percent share of the property and casualty insurance market, according to government data.
PricewaterhouseCoopers interviewed chief executives of 24 foreign insurance firms operating in China for the study.
The report said two of the companies are expecting premium income to triple or quadruple in 2007, with most of the remainder expecting growth of between 25 percent and 100 percent this year.
The pace of growth of foreign insurance companies in China will accelerate as regulators license new branches, allowing the firms to expand more quickly, said David Campbell, a partner at PricewaterhouseCoopers.
The 24 companies surveyed operate around 100 branches now, but said that number will likely more than double to 211 by 2010. The figure includes eight property and casualty companies that said they plan to expand their branches to 60 by 2010 from 22 now.
Campbell said the expansion of foreign insurers into pension and related products, and even into some enterprise business and annuities, are key areas of their growth in China.
In addition, he said the commitment by insurers' parent companies to grow their China business will also support their expansion.
'On the capital side, I see they're prepared to fund the operations as fast as the government can allow them to grow,'Campbell said. 'Also, a large amount of senior people now sit in the China operations.'
The report said difficulties in recruiting and training staff and expanding distribution channels are the most pressing issues these companies now face in China.
It said the foreign companies plan to more than double their employees in China by 2010, while targeting an even faster growth rate for agents at life insurers.
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