Are foreign insurers entering China as “wolves” or “catfish”?
Original title: Are foreign insurance companies entering China? Are they “wolves” or “catfish”?
A large number of powerful insurance companies have emerged in China.
Our reporter Ni Hao In the past two years, China’s insurance industry has accelerated its opening to the outside world faster than expected.
Strong and experienced foreign insurers may actively flood in. Some people worry that the insurance industry will face the impact of the “wolf coming”.
In this regard, a number of senior officials told the Global Times reporter that they need not worry too much. Foreign insurance companies entering China can have a “catfish effect”, which is conducive to the development of domestic insurance companies and the insurance industry, and promotes China’s advancement into an insurance powerhouse.
What’s more, the strength of domestic insurance companies is not what it used to be.
Door Yuekai intervened On October 15, the State Council of China issued a decision on amending the “Regulations on the Administration of Foreign Insurance Companies of the People’s Republic of China” (hereinafter referred to as the “Regulations”), further lowering the entry threshold for foreign insurance companies.
This modification is mainly reflected in three aspects: first, foreign insurance group companies are allowed to invest in the establishment of foreign-funded insurance companies in China, while previously restricted to the same type of subsidiaries of foreign insurance groups.
After the amendment, the degree of breakthrough eased foreign access conditions; secondly, the conditions for foreign insurance companies to “operate in insurance business for more than 30 years” and “have established representative offices in China for more than 2 years” are cancelled, which means more abundant insuranceEnterprises can enter the Chinese market. Third, foreign financial institutions are allowed to invest in foreign insurance companies, which means that in addition to the previous application for licenses and equity participation in Chinese insurance companies, foreign countries have another channel to enter the Chinese market.
Liu Fushou, the chief lawyer of the China Banking and Insurance Regulatory Commission, also stated at the regular briefing of the State Council on the 15th that the transition to the opening up of China’s financial industry has continued to deepen, and the licensing conditions and business scope of Chinese and foreign insurance companies have basically become consistent.
In the past two years, 夜来香体验网 China’s opening up of the insurance industry has suddenly accelerated, and its intensity and depth have far exceeded expectations.
The financial industry’s opening timetable for 2018 states that the proportion of foreign shareholders in life insurance companies will be relaxed to 51%, and there will be no restrictions after three years; the restrictions on the scope of foreign insurance brokerage operations will be lifted, in line with Chinese capital; nationwideThe requirement to establish a representative office for two years before the establishment of a foreign insurance institution is abolished.
In 2019, relevant authorities and leaders have continuously stated to the outside world that they will further relax the degree of opening up of the insurance industry.
Until the amendment of the “Regulations” on October 15, a large number of relaxations were made in the entry requirements for foreign enterprises.
Liu Fushou disclosed at a press conference on the 15th that since China’s entry into the WTO, the number and scale of foreign insurance companies in China has steadily increased.
By the end of the second quarter of 2019, overseas insurance companies had established a total of 59 foreign insurance legal entities and 131 representative offices in China.
The data shows that the original premium income of foreign life insurance companies has increased from 84 in 2004.
3.4 billion rose to 2126 at the end of 2018.
5.4 billion, with a market share of 2.
64% climbed to 8.
The premium income and market share of overseas property and casualty insurance companies developed rapidly at the same time.
AIA is a foreign insurance company that entered mainland China to operate in the early days after the reform and opening up.
A staff member of the company told the Global Times reporter: “After the amendment of the” Regulations, “it means that it is more convenient for foreign insurance companies to come to the mainland for exhibitions.
For example, according to the original regulations, AIA was only allowed to go north to Guangzhou, Shenzhen and Jiangsu Zhanye, but in the first half of this year AIA had obtained business licenses in Tianjin and Hebei.
“” Wolf is here “?
After the amendment of the “Regulations”, the industry began to have some doubts: Can more professional and fully-experienced foreign insurance companies more conveniently develop their businesses in the Chinese market, does this mean that “wolves are coming” for Chinese insurance companies?
Hao Yansu, executive deputy director of the National Graduate Education Steering Committee and director of the China Insurance Market Research Center of the Central University of Finance and Economics, believes that the statement of “the wolf is coming” was okay when China joined the WTO that year, and it would be out of date now.
“The four major state-owned banks in China have all gone to the United States, but what can they do? Can they become mainstream financial institutions?
Conversely, can foreign insurance companies become the protagonists in China?
Hao Yansu said that foreign insurance companies have been in China for 27 years, but the growth rate in China has been relatively slow, and the premium market share is now only about 6%.
According to data provided by Zhu Junsheng, deputy director of the Insurance Research Office of the Financial Research Institute of the Development Research Center of the State Council, to the Global Times reporter, in 2018, the original insurance premium income of foreign insurance companies was 2,354.
3.4 billion, market share6.
In the regional insurance markets where foreign insurance companies in Beijing, Shanghai, Shenzhen and Guangdong are relatively concentrated, the market share of foreign insurance companies is 17 respectively.
95%, 19.84%, 10.
In the world’s second largest insurance market, these market shares of foreign insurance companies are not large.
Therefore, Wang Xujin, director of the Insurance Research Center of Beijing Technology and Business University, believes that in addition to legal and policy challenges in the Chinese market, foreign insurance companies also face the problem of premium investment in the Chinese capital market.
“It is undeniable that China’s capital market is different from western countries, and this is also a real problem facing foreign companies.
Wang Xujin said that another important issue facing foreign companies is that China has emerged and grown into large-scale insurance companies with business strength and technological innovation.
Zhu Junsheng told the Global Times reporter that before the WTO entry, the discussion in the insurance industry focused on how to protect local companies.
Now that the insurance industry is opening up wider, this problem has surfaced again.
There is an idea that there are other policies, both inside and outside, to protect the country’s insurance institutions.
This is actually an illusion. Few industries are competitive because of government protection.
The result of protection is often a monopoly and damage to consumer interests.
Foreign countries are also facing the test of opening up to bring progress, and closure is bound to lag behind.
Shen Wanhongyuan analyst Ma Kunpeng believes that opening up foreign insurers may intensify competition in the short term, but it is difficult to shake the competitive advantage of domestic insurers in the long run.
He believes that dancing with wolves shows Fang’s true nature.
Liu Fushou also said that he welcomes more qualified foreign financial institutions to come to China: “Many foreign insurance companies entering the Chinese market have sufficient financial strength, good reputation, advanced management experience, professional knowledge and outstanding talents to provide domestic insurance.Institutional development has provided beneficial benefits, which is conducive to internal Chinese banks and insurance institutions to review their own shortcomings and accelerate reform and development.
“China is now a big insurance country, not a strong insurance country.
Wang Xujin said: “This opening, our focus is on how to transform a major insurance country into a strong one.
For Chinese companies, this is a question of how to practice their internal skills, not a question of resisting external competition.
The AIA staff told the Global Times reporter that foreign insurance companies entering China on a large scale will inevitably continue to generate the “catfish effect”, promote the entire market, and gradually push domestic insurance companies to upgrade their products and adjust their pricing.
Of course, it is not only Chinese-funded enterprises that have the right to open the market.
Zhu Junsheng believes that the continuous opening of the market will inevitably promote the growth of foreign insurance companies in China.
“The merger of foreign ownership life insurance companies will be liberalized, and the organization of foreign life insurance companies will be more flexible, which will greatly enhance the interests and freedom of foreign life insurance companies’ operations, which will increase their enthusiasm for expanding the Chinese insurance market.
The growth of the transfer agent team of foreign life insurance companies and the development stamina of premium payment gradually show their market share will gradually increase.
Bank insurance, insurance technology market share will also be increased.
Through the deepening of division of labor, foreign property and casualty insurance companies will promote technological innovation, reform business models, and improve operating efficiency, and the insurance market share may gradually increase.
Ma Kunpeng believes that foreign insurance capital will strive to move from the edge of the stage to the center with a “small but beautiful” competitive attitude.
But Wang Xujin said: “Now the time has come to test foreign insurance companies. They must seriously explore the needs of the Chinese domestic market and truly make products suitable for Chinese people.