Taiwan's China Life Insurance said it is aiming to form a joint venture in China by 2007, in the latest such move as the island allows more cross-strait investment by its insurance sector.
Taiwan's sixth-biggest insurer by revenues said it is looking for mainland partners for a 50-50 joint venture, but declined to be more specific.
But industry sources on the mainland said the firm is targeting second-tier Chinese life insurers or non-financial Chinese firms, which have strong capital and are interested in entering the insurance business.
China Life received approval from Taiwan regulators last week to set up the joint venture, making it the fourth one after bigger rivals Cathay Life, Shin Kong Life and Taiwan Life Insurance formed their own ventures.
Only a handful of insurers have received such permission, as Taiwan's financial industry lobbies hard for regulators to ease cross-strait investment rules.
Faced with a limited domestic market and low interest rates at home, many Taiwan insurers are trying to tap a huge mainland market where personal savings have reached roughly $2 trillion.
With its booming economy, China will have more and more people buying insurance policies.
China Life and its Taiwan rivals are largely targeting a niche market of more than 1 million Taiwanese businessmen, students and travellers living or working in the mainland.
CHALLENGE AND CHANCE
The insurance sector in China, the world's fourth-largest economy, is expanding as Beijing dismantles a cradle-to-grave welfare system.
Life insurance premiums in China rose 14.2 percent to 364.62 billion yuan ($45.5 billion) in 2005, according to official data. But fewer than 4 percent of China's 1.3 billion people have insurance coverage.
While Taiwan insurers are eager to gain a presence in China, they have had a hard time finding partners there, in part because their counterparts asked for favourable terms.
"A challenge facing us is to get the right partners. That is not going to be easy at all," Kuo said.
China Life's assets totaled T$212 billion (US$6.5 billion) as of March 2006.
Number-two player Shin Kong, the flagship unit of Shin Kong Financial Holding, has spent more than a year looking for a partner and has still not found one.
Of the four companies that have been approved to invest so far, the only one to form an actual joint venture has been Cathay Life, with China Eastern Airlines. Cathay is the flagship of Taiwan's biggest financial holding firm Cathay Financial Holding Co.
China Life still needs approval from Taiwan's Investment Commission and China's regulators before setting up the venture.
Source:佚名