Heng An Standard Life Insurance Co Ltd, a 50-50 joint venture between British Standard Life Assurance Co and Tianjin-based TEDA (Tianjin Economic Technological Development Area) Investment Holding Co Ltd, set up business in Beijing yesterday.
The Tianjin-based insurer also has a branch in Qingdao, in East China's Shandong Province.
"Our next target will be Dalian, Chengdu and Chongqing," said Alan Armitage, acting general manager of Heng An Standard Life. "And we will try to open three to five branches this year."
In terms of the selection of cities, Alan said the firm's major concern was that the population should be above 5 million.
Beijing, with a massive population and huge market potential, is particularly appealing to Heng An Standard Life, Armitage said.
The insurance market in the national capital rebounded by a large margin last year, with gross premium earnings of the city's insurance companies reaching 49.8 billion yuan (US$6.2 billion).
This is an increase of 78.4 percent over 2004, according to figures from the municipal insurance regulatory commission.
Life insurance played a dominant role in the city's insurance market, with premiums reaching 43.1 billion yuan (US$5.4 billion) last year, doubling the figure for 2004.
By the end of 2005, Beijing had 44 insurance companies, including 13 firms founded last year.
Beijing's rich pool of talented workers has also helped quench Heng An's thirst for insurance professionals.
Heng An Standard Life says it has a new sales model, called financial planning consultants (FPC).
The difference with other insurers is that under the FPC scheme, workers are paid a salary, not just commission, and are company employees.
This approach provides the company with much greater control over the quality of its services, compared with the situation if it only had agencies working for it.
"Our method is to encourage our sales people to develop their careers in sales with quality training and development. This will, in turn, lead to a better achievement by every staff member," said Zhang Jian, general manager of Heng An Standard Life's Beijing Branch.
"Our target for this year is to have a team of 300 FPC workers."
As this system develops, the business focus for Heng An will shift to individual insurance.
The proportion of individual insurance will rise from 30 percent in 2005 to 50 percent this year, and this figure is likely to exceed 60 percent in the Beijing market, said Zhang.
Heng An Standard Life has a registered capital of 1.3 billion yuan (US$157 million). It was established in December 2003.
The insurer received premiums of 219 million yuan (US$27 million) in 2005, according to figures from the China Insurance Regulatory Commission.
(China Daily March 22, 2006)