Life insurance JV opens Beijing branch

Sino-British insurer AVIVA-COFCO Life Insurance Co Ltd unveiled its Beijing branch yesterday, its second local branch in one of the world's most promising insurance markets.

The company, a 50-50 joint venture between British insurance giant Aviva Plc and China National Cereals, Oils & Foodstuffs Import & Export Corp (COFCO), will open a third branch in Chengdu, Southwest China's Sichuan Province, today.

"China is a key part in our global growth strategy," Philip Scott, group executive director of Aviva, said at the opening ceremony.

"We are proud to have the opportunity to provide professional financial services and products to the people of Beijing," he said. "And I believe the life insurance market in Beijing will develop rapidly."

China represents a huge business opportunity for Aviva, Scott said, citing its rapid economic growth and currently a low penetration level of insurance.

China's insurance penetration ratio, or premiums divided by gross domestic product, stood at only 3.3 per cent, only 10 per cent of the British level.

AVIVA-COFCO was set up in Guangzhou, Guangdong Province, at the beginning of last year.

The quick establishment of presence in Beijing and Chengdu brings the company a major step closer to its ambitious goal of grabbing a 10 per cent share in 10 Chinese branch cities by the end of 2010, said Wu Xiaohui, chairwoman of AVIVA-COFCO.

"We will pursue both speed and quality during the process," she said, adding the firm would not let rapid expansion erode the importance of profitability.

The company is a latecomer to the lucrative Beijing market compared to many other foreign insurers. The city's life insurance premiums totalled 22 billion yuan (US$2.7 billion) last year, accounting for 3.6 per cent of bank savings by local residents, which compares to the European Union's 20 per cent ratio of life insurance premiums to household financial assets.

"Although there has been a number of reputable insurers in Beijing, I believe that by taking the advantage of its two shareholders' financial strength and expertise, AVIVA-COFCO will bring a fresh breeze into the local insurance industry," said Zhou Mingchen, chairman of COFCO.

Source: China Daily