A Sino-US joint venture insurance brokerage company is expected to
get a go-ahead signal within a month, making it the first
foreign-funded brokerage firm to earn a license in China's
insurance market.
The world's second largest insurance brokerage firm, Chicago-based
Aon Corp, said yesterday that it will soon receive a green light
from the regulatory authorities to form an alliance with Cofco, one
of China's largest state-owned enterprises.
The license is scheduled for release immediately after China's
official accession into the World Trade Organization (WTO),
expected on December 11. WTO membership means the country will
further open its domestic market to foreign investment.
The move would play a pioneering role in the opening of China's
insurance brokerage market, which is still relatively
underdeveloped compared with the global insurance market.
"We could bring our latest expertise and management skills into the
market," said Michael O'Halleran, president and chief executive
officer of the company, who is in Beijing for a five-day visit that
includes talks with Chinese insurance regulatory authorities and
business insiders.
Headquartered in Shanghai, the country's financial hub, the 50-50
joint venture will focus on the development of the insurance
brokerage business for large multinationals, including joint
ventures and foreign-funded firms located in China.
But the joint venture will not be allowed to conduct business with
domestic enterprises or individuals after receiving its
license.
"We had fantastic discussions with our partners about the launch of
the joint venture yesterday," said O'Halleran.
Insurance brokerage businesses remain a fledgling industry in
China, with only a dozen domestic firms in business, and few of
them have a successful track record due to the insolvency of the
markets.
Other brokerage firms include 45 insurance agent firms and eight
insurance rating firms, with some 100 other companies now in the
preparatory stages for developing businesses in China.
China yesterday unveiled a set of regulations governing the
development of brokerage firms, making the market more transparent
for foreign investors seeking a presence in China.
"The insolvency of the brokerage market has had negative impacts on
the growth of China's insurance market," said Meng Long, deputy
director with the Brokerage Department of China Insurance
Regulatory Commission (CIRC), watchdog of the nation's insurance
industry.
(China
Daily November 30, 2001)