Recently, several Shanghai-based life insurance companies, including Chinalife CMG, received a fax from an Israeli risk management company seeking for information about the development of China's insurance sector. They wanted to know the procedure of registering an office by a foreign insurer, experience of insurance joint ventures, and the possibility of Israeli insurers' success on the local market.

As reported this Israeli risk management business was commissioned by a well-established Israeli insurance company. They will come to Shanghai soon to visit some local joint ventures in the insurance business to make their judgment about the market.

This reflects the increasing interest in the potential of China's insurance market since the country's WTO accession.

Open data shows that 70 percent of Israel's insurance investment overseas is made by its three biggest insurers which hold nearly 80 percent of policies. Israel's insurance market, albeit small in the global insurance market, plays the leading role in the Middle East market where half of the life insurance business is run by Israeli insurers.

Religious reasons confine the life insurance business in Arabic markets. For example, any contract rendered to have its fulfillment based on any future uncertainties is not allowed in some areas. Payment of interest is also prohibited in some areas, making it impossible to market life insurance. This may also be one of the reasons for Israeli investors' interest in more overseas markets in recent years.

Analysts say very few life insurers with foreign capital, either solely foreign-funded ones or joint ventures, are making profits on the Chinese market where more players keep joining the fierce competition.

By People's Daily Online