The Chinese central government has signalled that opening of financial markets and the insurance sector in particular will remain key themes for the country’s regulatory efforts in 2019.
At a routine press conference held by the China Banking and Insurance Regulatory Commission (CBIRC) on 10 January Ruan Jiang (阮江), vice-CEO of Groupama-AVIC Property Insurance (中航安盟保险有限公司), said that expanding the openness of the Chinese insurance sector will strengthen the confidence of foreign shareholders when it comes to investment in the Chinese insurance sector, while also being of major benefit to foreign-invested insurers.
Groupama-AVIC is the first foreign-invested insurance company to register its headquarters in western China, as well as one of China’s first specialist agricultural insurers.
“The next step will be for our shareholders to to continue to expand investment in China, especially in our own operations and development, and provide even higher quality insurance services across a broader area,” said Ruan.
Since 2018 China’s insurance sector has undergone opening at an unprecedented pace with the launch of a slew of key measures, such as allowing foreign investors to obtain 51% equity stakes in personal insurance companies, to be followed by a complete scrapping of ownership restrictions three years subsequently.
Chinese regulators have also allowed foreign investors that satisfy requirements to engage in insurance agency and insurance adjustment operations in China, while expanding the business scope for foreign invested insurance brokers so that it’s consistent with that for domestic counterparts.
The moves have piqued the interest of a number of overseas insurers, with Allianz obtaining permission to establish a Chinese vehicle from CBIRC at the end of November 2018.
Zhu Junsheng (朱俊生), an insurance researcher with the State Council Development Research Center, said to Yicai that the expansion of foreign-invested insurers into China’s insurance market would further expand the influence of their prudential operating concepts, permit “spillover” of their long-term growth experiences, and thus expedite the high-quality growth and model transition of the Chinese insurance sector.