Overseas Insurers Eye China's Insurance Brokerage Market

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Last updated at: (Beijing Time) Thursday, October 31, 2002

Overseas Insurers Eye China's Insurance Brokerage Market

World-renowned insurers are seeking to find a niche in China's insurance brokerage market with the aim of expanding the fledgling industry that is presently funded solely by domestic enterprises.

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World-renowned insurers are seeking to find a niche in China's insurance brokerage market with the aim of expanding the fledgling industry that is presently funded solely by domestic enterprises.

China offered exciting opportunities to insurance brokerages with large capacity and expertise, James Vickers, executive president of the United Kingdom-based Willis Reinsurance Brokerage, told the seminar, "Meeting risk challenges in the 21st century", in Shanghai.

Most of China's existing insurance brokers lacked sufficiently trained and experienced employees, said Vickers. "That's why theirrole in the insurance market is limited," he added.

Insurance brokerage is still an infant industry in China, with the first brokerage -- Jiangtai Insurance Brokers Co. Ltd. -- established in the capital, Beijing, in 2000.

By the end of June, 2002, China's brokers totaled 27, but their total share of the domestic market was only one percent.

Their counterparts in Britain, however, took up over 90 percentof the insurance market, said Vickers.

Insurance brokerage has about 200 years of history in Europe and the United States. They help their clients choose the insurers that offer reasonable prices and discounted terms, and provide risk management and insurance advisory services.

China faced a pressing need to set up a regulated and orderly insurance brokerage market now that it was a member of the World Trade Organization, said James Sutherland, a senior marketing executive with Lloyd's, another leading British insurer.

A booming brokerage market would benefit China's insurers and the insured alike and would eventually boost its national economy, said Sutherland.

Insiders say a number of overseas brokers are seeking to enter the Chinese market through joint ventures with local counterparts, all of which are funded solely by domestic enterprises.

They would bring state-of-the-art products and expertise to provide better solutions for the Chinese consumers, said Vickers.

The seminar was jointly sponsored by the Shanghai Office of theChina Insurance Regulatory Commission and Lloyd's.

China's insurance premiums amounted to 210.94 billion yuan (26 billion US dollars) in 2001, and 226.27 billion yuan (28 billion US dollars) in the first nine months of this year, representing a 51.4 percent rise year-on-year.

By the end of last year, 52 insurance companies were operating nationwide, with over 70,000 agencies and over 1.2 million employees.

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