Insurance venture plans local branches
By Zhang Jin (China Daily)
Updated: 2004-07-02 10:06

AVIVA-COFCO Life Insurance, a Sino-British joint venture insurer, will open branches in Beijing and Chengdu in Southwest China within the year. The move comes as foreign insurers accelerate their expansion in China as market restrictions are gradually lifted.

"If everything proceeds as planned, the Beijing branch will be officially launched in September, and the Chengdu branch will start business in October or November," said Liu Xiaolan, senior supervisor of the company's marketing and planning department.

The Guangzhou-based 50-50 joint venture, a marriage between the United Kingdom's largest insurer, AVIVA, and China's largest grain trader China National Cereals, Oils & Foodstuffs Import & Export Corp, has a goal of grabbing 10 per cent of the life insurance market in at least 10 targeted cities in China by 2010.

The entry into Beijing and Chengdu is a step towards this goal, Liu said. The insurer is expected to be the first foreign-invested venture to enter the Chengdu market.

In Beijing, about 40 per cent of branch insurance premiums are expected to come from insurance agents and brokers, another 40 per cent from partner banks and the remaining 20 per cent from group insurance, the company said.

AVIVA-COFCO gained approval to establish branches in Beijing and Chengdu from the China Insurance Regulatory Commission in February and May respectively. The company was established in January 2003.

Based in London, AVIVA is the seventh-largest insurer in the world, and has businesses in more than 20 countries, covering life insurance, long-term savings and funds management. It has representative offices on the Chinese mainland in Beijing, Shanghai, Guangzhou and Chengdu.

The company's move is part of the recent expansion spree by joint-venture insurers, as China's insurance market is due to be opened wider in the coming years.

Guangzhou, the capital of South China's Guangdong Province, was among the first batch of Chinese cities opened up to foreign insurance companies in the first year after China joined the World Trade Organization in 2001. The restriction for Beijing was lifted last December.

Geographic restrictions for foreign insurance companies will be lifted by this December, three years after the nation joined the global trade body.

Eyeing the looming opening-up, other major foreign insurers have also stepped up efforts to expand their presence in China.

Manulife-Sinochem Life In-surance, the first life insurance joint venture in China, opened its Beijing branch in May, following the launch of its headquarters in Shanghai in 1996 and an office in Guangzhou at the end of 2002.

The company has also applied to open branches in Ningbo and Suzhou in East China.

Manulife Sinochem is a venture between Canada's Manulife (International) Ltd, a life insurance arm of Manulife Financial, and Sinochem Group, the largest chemicals trader in China. The Canadian party holds 51 per cent and the Chinese 49 per cent.

Generali China Life Insurance, a Sino-Italian joint venture, also made a northern march last month as it opened a Beijing branch, the company's second after its Guangzhou office.

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