Allianz has received the approval from the China Banking and Insurance Regulatory Commission (CBIRC) for the preparatory establishment of a 100% owned insurance holding company in China, the global insurer announced in a statement yesterday.
First-ever wholly-owned insurance company by a foreign insurer
The company—Allianz (China) Insurance Holding Company Limited—will be China’s first-ever wholly-owned insurance holding company by a foreign insurer and will be based in Shanghai.
This holding structure will anchor Allianz Group’s long-term commitment to China by enhancing its strategic and financial flexibility to capture business opportunities and drive long-term success in the market.
When fully established, Allianz (China) Insurance Holding Company will be strongly capitalised, according to its application.
China is among the world’s top three largest insurance markets and the regulatory approval for Allianz follows a series of measures recently announced by the Chinese government to further open up and encourage investment in China by foreign insurance and financial institutions.
A significant milestone for Allianz
Allianz group chairman and CEO Oliver Bate said, “Allianz is proud to be the first foreign insurer to commence the establishment of a holding company in China—a significant milestone for us to expand our presence in this strategic market.
“This announcement also follows the positive long-term cooperation between China and Germany, allowing our Chinese and international clients to be able to enjoy Allianz’s comprehensive financial and risk management solutions and services, and benefit from the continued growth and liberalisation of China’s financial markets.”
Allianz regional CEO for Asia Pacific George Sartorel said, “China is central to our growth strategy for Asia. This development positions Allianz strongly to combine our global knowledge with deep insights into local consumer and industry needs. We look forward to contributing to the continued development and innovation of China’s fast growing insurance sector, as well as to better serve Chinese customers and communities.”
Allianz (China) Insurance Holding Company marks the latest milestone for Allianz in China, a market it has served since the early 1910s. Today, with its 2,000 employees and affiliates in the country, Allianz offers the full spectrum of protection, risk management and asset management solutions and services in China. Allianz expects China to continue to set the pace for global insurance market growth, with premiums expected to rise 14% per annum in the coming decade.
Allianz expects the holding company to be established in 2019 and will work on the necessary preparatory work under the guidance and assistance of the regulatory authorities.
CBIRC expected to make things easier for foreign-owned joint ventures
According to industry sources CBIRC is likely to make it easier for foreign-owned joint ventures to expand into new provinces, moving away from its current practice of rationing approvals for new branch opening.
It has thus far, however, not been smooth sailing for foreign insurers in China, despite a low market penetration of 3%. The total market share of foreign life insurers in China was just 6.97% last year, while the same was 1.96% for foreign property and casualty insurance companies, according to Guotai Junan Securities.