Foreign insurance companies yesterday called on China's insurance regulator to streamline licensing requirements for their geographical expansion and improve access to investment channels.

China has removed geographical restrictions on foreign insurers as part of its World Trade Organization (WTO) commitments, but it has a separate and more complex licensing process for foreign firms.

"The separate licensing process may slow down foreign insurers' pace of geographical expansion, and we hope the regulator could eliminate the barriers," David F. Snyder, vice-president of the American Insurance Association, told China Daily when attending the 13th IAIS Annual Conference yesterday in Beijing.

Although domestic firms opening new locations can have these approved in one batch, foreign firms require individual approval for each location.

Bartholomew Ng, China country manager of ING Insurance (Asia/Pacific), echoed Snyder's view.

"We hope the regulatory body, the China Insurance Regulatory Commission (CIRC), could further streamline the licensing process," he said.

Ng also hoped that foreign insurers could be granted more choices in terms of investment.

"Although the CIRC has been striving to broaden investment channels for insurers, only a few are qualified to do that," Ng explained.

According to Jerry de St. Paer, executive vice-president of XL Capital Ltd, the CIRC has been very proactive and responsive on the property and casualty side.

"I am very impressed by the achievements made by the CIRC over such a short period of time," said St. Paer. "Our focus here is to learn about the Chinese market, rather than the policy side."

Bermuda-based XL Capital, which is mainly a non-life insurer, wants to focus its future business in China on reinsurance and liability insurance.

"Although liability insurance is still in its infancy in China, market demand has increased rapidly as more multinational companies rush into China and more local enterprises go global," St. Paer explained.

China's insurance sector met all commitments to the WTO by the end of 2004, becoming the first in the financial sector to be fully opened.

There are now no geographical restrictions on foreign insurers' business expansion. In addition, China cancelled compulsory session business in the reinsurance sector this year.

China currently has over 100 insurers, of which 44 are foreign-funded or joint ventures.

According to CIRC Vice-Chairman Li Kemu, although foreign insurers only have an overall market share of around 6 per cent, they have managed to grab 18 per cent to 20 per cent in major cities such as Shanghai and Guangzhou.

By the end of 2005, China's premiums totalled 492.7 billion yuan (US$62.4 billion), while the insurance sector's total assets currently stand at 1.8 trillion yuan (US$225 billion).

"By 2010, we expect to see China's premiums and total assets exceed 1 trillion yuan (US$126.6 billion) and 5 trillion yuan (US$632.9 billion) respectively," said CIRC Chairman Wu Dingfu.

Source: China Daily