The total number of foreign insurers in China is expected to reach 70
by 2011 from fewer than 50 at present, with their overall market share
to expand from 6% to 10% in the same time frame, according to a survey
by the international accounting firm, PricewaterhouseCoopers. The
foreign insurers covered in the study project annual premium growth of
between 20% and 50% from 2008 to 2011.
However, this projected
expansion of foreign insurance companies in China is expected to be
made in the face of several challenges like regulatory barriers,
intense competition and high staff turnover.
Foreign insurers
are frustrated by restrictions governing joint-venture structures which
prohibit foreign majority control and the slow branch approval process
by regulators. They also believe that competition is intensifying and
regard their domestic rivals as highly innovative in product
development.
With the industry's talent pool limited in China at
present, foreign insurers find it difficult to hire staff across the
board, and in particular, senior executives, actuarial personnel,
branch and middle management. Skills are lacking, especially in sales
and marketing functions. Staff retention is also a concern, with two
thirds of respondents expecting turnover of 10% to 24% this year.
The
survey, covering strategic and emerging issues surrounding foreign
insurance companies in China, involved 28 respondent companies,
comprising 19 life insurers and nine general insurers. (AIR)
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