Overseas Insurers Optimistic About Chinese Market on Eve of WTO Entry

Officials of many overseas- funded insurance companies are making optimistic predictions about the market in China on the eve of the country's entry into the World Trade Organization (WTO).

"We are very lucky to be here earlier than many others," said Joseph Sin, president of AXA-Minmetals Assurance Co., Ltd., a Sino- French joint venture insurance firm in Shanghai.

More overseas insurers are expected to be allowed to enter the Chinese market, which will trigger fiercer competition, he said. But, he stressed, "No competition, no development. This is the consensus for all insurers here," he said.

His company was set up in Shanghai in June 1999 and became the ninth overseas insurer in this largest metropolis and financial center in China. The company's business has been improving gradually, with the number of salesmen increasing to almost 1,000, according to the president.

Local experts have also expressed confidence in the insurance market after WTO entry. "After China becomes a WTO member, the country will have to speed up the pace of opening up the local insurance market," said Xu Wenhu, a professor and deputy director of the Fudan University International Insurance Institute. Xu said more insurance companies and products are expected to appear in the country, and he predicted that the local insurance market will experience even greater competition. Shanghai was the first city in China to open its market to overseas insurers. Since 1992, when the U.S. International Assurance Co., Ltd. opened for business in the city, nine overseas insurance firms have joined in the market competition here.

Overseas insurers, who now hold only on-tenth of the local market share in Shanghai, have introduced their mature skills, advanced concepts, sound service, and standard management to the country.

Looking forward to the post-WTO-entry era, overseas insurance firms here are quite optimistic, saying that they believe the Chinese government will gradually relax its control on the scope and form of business allowed for overseas insurance companies, and are of the opinion that there will be greater room for overseas insurers to develop in China.

"We are preparing for the days after China is admitted into the WTO," Dick Wan, vice president of AXA Minmetals, said, adding that "We plan to open branches in other cities."

Over the past few years, overseas-funded insurance companies have been quite successful in China.

Zhong Hong Life Insurance, a Sino-Canadian joint venture with Canada-based Manulife Financial Group, has been doing a brisk business ever since it opened four years ago.

"We are doing better than any other Manulife branches in the world," said general manager Chen Bingen. Chen disclosed that his company is working on some new products in order to meet the forthcoming competition in China after its WTO entry. And many companies still outsiders to the Chinese market are now working to take a slice of the insurance business in the country as soon as possible.

Qiao Yide, Shanghai representative of New York Life International, Inc., said his company has handed over its application and is still waiting for a reply. "We do hope to take an upper hand in the competition," said Qiao, who could not help revealing his anxiety.

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