The whole 2006 saw foreign insurance companies achieved premium income of 25.92 billion Yuan, accounting for 4.59% of the market share, which was up 1.47% over the previous year. In cities of Beijing, Shanghai and Shenzhen, the market shares of these foreign insurance companies reached up to 21.2%, 19.1% and 11.9% respectively.

  2006 Foreign Capital Usage in the Insurance Industry

In 2006, half of the foreign insurance companies that have entered the China insurance market started increasing their investment and opening up new fields. Increasing the investment creates opportunities for opening up new fields and the latter makes it possible to dig the Chinese market deeper. This year saw almost 20 foreign companies were newly settled in Chinese cities, expanding the market to the eastern, central and western areas, which filled the gaps that there had been no foreign insurance companies in Hunan and Henan. Meanwhile, not only foreign companies meet the needs of direct services in the insurance market, but they also established almost 10 intermediary services agencies specializing in insurance brokers, insurance assessment and insurance agents. They also newly established agents from almost 10 insurance agencies from 7 countries in the important cities in China.

Foreign capital plays an active role in the Chinese insurance market, inputting new service concepts and products development concepts and promoting the products innovation in the Chinese insurance market. To a large extent, a competitive and fair-play situation has been formed between Chinese and foreign insurance companies. Insurance consumers and policyholders get real benefits from the process of opening up the insurance market. Chinese insurance companies gradually are improving as they compete with foreign ones. They begin to be able to operate overseas and plan to enter the international insurance market.

Until now, the insurance industry has basically realized the wholly opening up except that foreign insurance companies can’t operate the service of strong risk payment and that foreign life insurance companies must be Chinese-foreign equity joint and their shares can’t be more than 50%. It’s a further step the Chinese insurance market keeps breast with the international one.

According to the newest statistics by CIRC, until now there have been 47 foreign insurance agencies from 15 countries and areas that have altogether 121 agents in China. The main multinational insurance and finance groups in the world and insurance companies in developed countries have all entered China. At present Chinese insurance market has become one of the most important new insurance markets in the world.

Since the opening up of the insurance market, there has been overseas capital of 10 billion RMB in all. Foreign companies enter China by establishing foreign insurance agencies and holding shares of Chinese insurance companies. Meanwhile, it inputs a large amount of funds into the economic and social construction, which improves the investment environment and promotes the development of the capital market.

As for the insurance industry, foreign agencies’ entering will bring great development opportunities. The reasons are: (a) compared with other countries Chinese insurance depth and density stay at a low level, with large follow-up market development space. (b) China’s restrictions on capital usage of insurance companies will be gradually loosened, with possibly big breakthrough when it comes to stock investment and overseas investment. (c) China insurance structure is not accomplished. The development space for the basic old-age insurance is big. In addition, the government policies are strongly supportive. There are great chances in the following life insurance services.