The Insurance Working Group of the European Union Chamber of Commerce in China has made several recommendations for the further liberalisation of the Chinese insurance market, including allowing foreign insurers to apply for more than one branch licence simultaneously.
“Currently, the combined market share of China’s four biggest insurance companies— People’s Insurance Company of China (PICC), Ping An Insurance, China Pacific Insurance Company (CPIC) and China Life Insurance—stands at a painfully conspicuous 60%, against the combined 2% share of foreign-invested companies,” says the chamber.
For this reason, the working group advocates a comprehensive, ongoing dialogue with the CBIRC, with the aim of contributing towards meaningful industry reforms that will finally allow foreign-invested companies to bring their know-how and best practices into China.
The recommendations are set out in the Chamber’s primary annual publication ‘The European Business in China – Position Paper’. They are:
- Allow foreign insurers to apply for branch licences in more than one province per time per year
- Update and expand existing regulations on licences
- Clarify the rules of foreign ownership in insurance services
- Create more opportunities for foreign insurers to contribute to China’s pension reform
- Clarify Internet insurance business including allowing foreign insurance players to set up Internet insurance companies.
The Insurance Working Group is the voice of Europe’s insurance industry in China. It represents leading European insurers, brokers and other service providers engaged in life, non-life, reinsurance and speciality insurance.
Members of the group consider China a long-term priority market. They are fully committed to contributing towards the sustainable growth of the Chinese insurance market and they are aware of the crucial role commercial insurance plays in China’s economy and society. To this end, they want to provide added value to the industry by introducing best practices and technical know-how, the paper says.
The working group notes recent liberalisation measures introduced in the Chinese insurance market and believes that continuing along this path of win-win engagement and cooperation will be beneficial for both China and foreign-invested companies. For instance, China announced that it would lift restrictions on foreign ownership of life insurance companies by 2020, earlier than the original plan of 2021. Currently, the ceiling on foreign ownership in these entities is 51%. A
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