Dah Sing Life Assurance Co, a wholly-owned subsidiary of the Hong Kong-based Dah Sing Financial Group, bought a 20 percent stake in new firm Great Wall Life Insurance Co, which opened for business Thursday.

The mainland's insurance sector, with a 30 percent annual growth rate over the past two decades, is attracting Hong Kong's financial enterprises, China Daily reported Friday.

A Standard & Poor's overseas report indicated China's life insurance sector has a long-term growth potential because of low penetration and increasing demand.

Other examples include the Pacific Century Insurance Holding Ltd's planned co-operation, by taking a minimum stake of 10 percent, with Hainan Airlines Group to set up a life insurance firm; Asia Financial Holdings has a 10 percent stake in PICC Life Insurance Co, a new firm which opened for business last week.

Meanwhile, the HSBC bank, having acquired a 19.9 percent stake in Ping An Insurance, is thinking about establishing a joint venture insurance firm on the mainland next year.

"Hong Kong players' unprecedented enthusiasm in the mainland's insurance sector is mainly due to the saturation of Hong Kong's life insurance market," said Wang Guojun, an insurance professor at the University of International Business and Economics.

Foreign insurance giants such as AIG and AEGON currently dominate the Hong Kong market, leaving limited room for domestic insurers.

With an investment of 7.4 million US dollars, Dah Sing Life Insurance is one of the three biggest shareholders of Great Wall Life. The other two big shareholders are the Beijing Huarong Investment Company and the Beijing Financial Street Construction Group, each having a 20 percent stake.

Wang Boling, financial director of the Dah Sing Financial Group, said the firm will pump more cash into Great Wall Life in the next year to fuel its expansion.

Wang Gongwei, president of Great Wall Life, said "corporate governance and management, rather than the speed of business expansion, is the most important thing."

With registered capital of 300 million yuan (37 million US dollars), Great Wall Life will focus on group, individual life and banking insurance, and will lean on banking insurance in the early stages.

Source: Xinhua