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Liberty Mutual Group heads west
The eighth largest property and casualty insurer in the United States, the Liberty Mutual Group, is expected to become the first foreign insurance company to establish business operations in China's vast western hinterland area, according to China Daily.
The company filed documents with top financial authorities for the go-ahead to launch a property insurance company three months ago, when the central government initiated the huge western development programme in a move to narrow the wide economic gap between the coastal and central and western regions.
Rather than establishing a joint venture insurance company as most foreign life insurers have on entering the China market, the planned property insurance company will be a wholly-owned subsidiary property insurance firm under the control of the group in Chongqing, a flourishing metropolis in western China.
"We are very optimistic about the application as China is now speeding up its efforts to open the domestic insurance market as it's accession into the World Trade Organization approaches," said Peter Lin, president and chief operating officer for the Asia Region under Liberty International.
"And there will be tremendous business opportunities as more and more companies and business turn their heads westward as the western development programme goes on," said John Kimber, managing director of China Development under Liberty International.
But Lin declined to forecast an exact date for the licence offering.
"It is beyond our control, but we hope it will be realized as quickly as possible," said Lin.
In contrast, most of the foreign insurers allowed to develop their businesses in China have chosen economically developed coastal areas, such as Shanghai, Guangzhou and Tianjin, as their first locations in the China market. Such cities are believed to be among the most profitable, yet still fledging, markets for the world's insurance sectors.
Coupled with local universities in Shanghai and Chongqing respectively, the company has kicked off several research projects in casualty injury insurance in China, which the company hopes will gain them a larger stake in the market in the long term.
"We will be able to bring our abundant expertise in property insurance and working injury protection into this booming market after the establishment of the company," said Kimber.
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