Joint ventures, easing of curbs woo experienced overseas players
Hong Kong and overseas companies have upped the stakes in the race for a slice of the C hinese mainland ’s robust life insurance market, while mainland clients continue flocking to Hong Kong to snap up insurance policies.
Industr y experts still see great potential for overseas insurers on the mainland despite the tightening of licensing regulations by the country’s insurance watchdog.
FWD Hong Kong — the insurance arm of Pacific Century Group chaired by Hong Kong tycoon Li Ka-shing ’s younger son Richard Li Tzarkai — has applied to the China Insurance Regulatory Commission (CIRC) for a life insurance license and is keeping its fingers crossed that the nod would be forthcoming.
The company believes its plan to tap the mainland marke t conforms with the State Council’s blueprint for promoting the development of diversified health insurance and innovative endowment, and aims to start operating there by specializing in online health insurance products and services.
“The mainland authorities have come up with a list of requirements that we need to fulfill. One of the key conditions is having a representative office up and running there for two years prior to winning a license. That’s a reason why we didn’t apply for the license earlier. As a young company, we need to wait for some time until our Shanghai office can satisfy such a requirement,” David Wong Tai-wai, chief executive officer of FWD Life Insurance, told China Daily.
But, how long it would take is still up in the air, he admitted.
“As far as we know, there’re more than 200 companies queuing up for licenses, but no one knows how long it will take before approval can be obtained. We hope to get the license within two years,” Wong said.
The CIRC issued new rules earlier this year to regulate the operations of insurance companies on the mainland, with a higher market entry threshold for Hong Kong’s small- and medium-sized insurance companies.
Hong Kong insurance sector lawmaker Chan Kin-por said the higher market entry rules will make it more difficult for small- and mediumsized enterprises to open up on the mainland, and only big multinational companies can have access to the mainland market.
We’re worried that once the market opens up, everyone will apply for a license. But, cultivating talent cannot catch up with the speedy development. This kind of expansion is worthless.”