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Insurers make a beeline for mainland market

By Lin Wenjie | China Daily | Updated: 2017-06-09 07:33

A resident looks at a row of skyscrapers, including the AIA Central building, the headquarters of AIA Group, in Hong Kong's financial district.Xaume Olleros / Bloomberg

Joint ventures and easing of curbs woo experienced players from overseas. Lin Wenjie reports from Hong Kong.

Hong Kong and overseas companies have upped the stakes in the race for a slice of the Chinese mainland's robust life insurance market, while mainland clients continue to flock to the city to snap up insurance policies.

Industry experts still see great potential for overseas insurers on the mainland, despite the tightening of licensing regulations by the country's insurance watchdog.

FWD Hong Kong - the insurance arm of Pacific Century Group, chaired by Richard Li Tzar-kai, younger son of Hong Kong tycoon Li Ka-shing - has applied to the China Insurance Regulatory Commission for a life insurance license and is keeping its fingers crossed that the green light will be forthcoming.

The company believes its plan to tap the mainland market conforms with the State Council's blueprint for promoting the development of diversified health insurance and innovative endowment, and aims to start operating on the mainland by specializing in online health insurance products and services.

"The mainland authorities have come up with a list of requirements that we need to fulfill. One of the key conditions is having a representative office up and running there (the mainland) for two years prior to winning a license. That's the reason we didn't apply for the license earlier. As a young company, we need to wait for some time until our Shanghai office can satisfy such a requirement," said David Wong Tai-wai, CEO of FWD Life Insurance.

How long it will take is still up in the air, he added: "As far as we know, there are more than 200 companies queuing up for licenses, but no one knows how long it will take before approval can be obtained. We hope to get the license within two years."

Earlier this year, the regulatory commission issued new rules to regulate the operations of insurance companies on the mainland, with a higher market entry threshold for Hong Kong's small and medium-sized insurance companies.

Hong Kong insurance sector lawmaker Chan Kin-por said the higher market entry rules will make it more difficult for small and medium-sized enterprises to open on the mainland, and only big multinational companies can have access to the mainland market.

"Even so, the prospects of entering the mainland market are definitely good for overseas insurers because an enormous population still lacks insurance protection," he said.

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