American International
Group Inc. (AIG) lost its place as the biggest foreign insurer
in China to Italy's Assicurazioni Generali SpA, which sold
a record US$2.4 billion group policy in the country this
year.
Generali rose
to the top spot, from fifth last year, helped by a contract
to insure 390,000 retired employees at venture partner China
National Petroleum Corp., figures released by China's insurance
regulator show. It was the first time in more than a dozen
years that New York-based AIG lost its top ranking in the
world's fastest-growing major economy.
Generali was
among foreign ventures allowed to sell group policies in
China since last year. AIG missed out. International insurers
are vying to expand their 2.3 percent share of China's US$52
billion market as the nation of 1.3 billion people dismantles
its cradle-to-grave social welfare system.
Group, corporate
and health insurance "will offer foreign insurers a
window of opportunity to tap into the huge potential of
these sectors," said Lillian Cheung, a senior economist
at Swiss Reinsurance Co. in Hong Kong. "This is particularly
important as domestic players enjoy strong franchise in
individual life insurance."
Life insurance
premiums in China grew at an average annual rate of 30 percent
in the past five years, making it one of the world's fastest
growing markets.
Generali and
its partner, China's largest oil company, controlled 18
percent of the nation's life insurance market in the first
quarter, compared with 0.1 percent last year. Generali sold
20.15 billion yuan (US$2.4 billion) of policies, including
the one-time contract with its partner, in the three months
ended March 31, as domestic and foreign insurers sold a
total of 112.4 billion yuan of policies.
"China
and India, being the two largest countries from a population
point of view, are obviously the two dream countries from
an insurance point of view,'' said Tim Ferdinand, a managing
director at CLSA Ltd.
Generali's
China venture Generali China Life Insurance Co., formed
in 2002, has offices in Beijing, Guangzhou and Foshan.
AIG, which
sold 4.8 billion yuan of policies last year, more than half
of the total collected by foreign life insurers, saw its
share of the life market fall to 1.29 percent at the end
of March from 1.51 percent at the end of 2004, as it isn't
allowed to do business in the group, health and pension
insurance market.
"The volume of group and pension business is big,''
said Connie Wong, a Hong Kong-based analyst at Standard
& Poor's. "One policy can bring in a lot of premiums,
helping the insurers to grow faster."
AIG sells life insurance products through eight branches,
while rivals such as ING Groep NV and Prudential Plc partner
with a domestic company and own a maximum 50 percent of
the venture.
China Life
Insurance Co., the country's biggest insurer, said foreign
entry into the group insurance market wouldn't hurt its
profitability. China Life sold 48.4 billion yuan of life
policies in the first quarter, holding 43 percent of the
life market.
The China Insurance
Regulatory Commission started publishing monthly insurance
data for the first time in August last year.
Source:Shenzhen
Daily
