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People's Daily Online>>China Business

Foreign insurers exit market

By Zhang Fengming (Shanghai Daily)

08:50, December 01, 2011

The recent withdrawals by some foreign insurers from China suggest that the country is losing its appeal despite the expanding domestic insurance market Moody's said in a report yesterday.

"As a whole, foreign firms have made little headway in the Chinese insurance market and to this day still suffer from small market share and low profitability despite significant growth opportunities," says Sally Yim, a Moody's senior credit officer.

"One key question raised by these recent withdrawals is whether they mark the beginning of a broader retreat by foreign insurers," Yim said.

Since last year foreign insurers, including AXA, New York Life and Sun Life, have cut or dispose of their stakes in Chinese joint ventures. Foreign insurers are allowed to set up wholly owned subsidiaries in the non-life insurance sector in China and can only own up to 50 percent in a life insurance venture.

As of September, foreign life insurers captured an insignificant market share of 3.7 percent, while property and casualty insurers's share was even lower at 1.1 percent. Out of the 46 foreign insurers operating in China in 2010, only 11 were profitable and their profit contributed negligibly to their global profits, the report said.

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