Chinese insurance companies were bracing for an onslaught by global competitors last month when a commitment to the World Trade Organization dictated opening the borders to foreign competition.
“Almost all insurance business is opening to foreign insurers,” says Xiaolin Li, a dean at Beijing-based Central University of Finance and Economics. “The exceptions are group insurance and life insurance, which requires a foreign insurance company to set up a joint venture with a local partner.”
In fact, foreign firms began arriving well ahead of the anticipated rush. According to the China Insurance Regulatory Commission (CIRC), the number of foreign-funded insurance companies in China increased from 14 in 2000 to 40 in 2005. More than half of the insurance companies in the Global Fortune 500 set up shop in China before last month.