France's CNP unveils joint venture with China's Post Office
French insurer CNP Assurances said it would enter a life insurance joint venture with China’s State Post Bureau–the Chinese post office–and expects to begin operations in China in early 2003.
CNP said it obtained a life insurance operating license in September 2001, then began negotiations with the State Post Bureau. The joint venture, which needs approval from the China Insurance Regulatory Commission, would be a 50-50 shareholding structure, the company said. The venture is to be based on CNP’s bancassurance model, distributing life insurance products through the bureau’s postal outlets.
According to CNP, China’s life insurance market has had an annual growth rate of 23% since 1997. Total premium income was 17.5 billion euro ($1=1.02 euro) in 2001. “The savings capacity of Chinese households (997 billion euro in bank deposits) and the growth in home ownership confirm the market’s significant potential, even if insurance density remains low (1.8% of gross domestic product),” CNP said.
Since China’s entry into the World Trade Organization last year (Bestwire, Nov. 12, 2001), a steady stream of foreign insurers has been seeking approval to do business in the country’s largest cities. Most recently, Cigna Corp. (NYSE:CI) said it won approval to do life insurance business in China (BestWire, Sept. 18, 2002). Before that, Sun Life Financial Services of Canada Inc. (NYSE, TSX:SLC) and its joint-venture partner, China Everbright Group Ltd., celebrated the official opening of insurance operations at a ceremony in Tianjin (BestWire, June 11, 2002).
In April, Munich Reinsurance Co. said it was the first foreign reinsurer in China to be granted a license (BestWire, April 16, 2002). Other insurers that have secured footholds in China, either by winning licenses or through joint ventures, include Ace Ltd. (NYSE:ACE) of Bermuda; American International Group Inc. (NYSE:AIG); Aegon N.V. (NYSE:AEG) and ING Group (NYSE:ING) of the Netherlands; MetLife Inc. (NYSE:MET), and New York Life Insurance Co.
(By David Pilla, senior associate editor, BestWeek: [email protected])
Copyright 2002 A. M. Best. Source : Financial Times
