US insurer poised to launch office in Shanghai next year
Insurer Aetna International of the United States will launch its Shanghai operation by October, chief executive Frederick Copeland says.
Mainland authorities last month granted Aetna a licence to operate a joint-venture life insurance business in Shanghai - only the seventh foreign insurer to win a licence.
Foreign life insurers are required to have local joint-venture partners and Mr Copeland said Aetna would team up with China Pacific Insurance Co, the second largest insurer in the mainland.
Each would have a 50 per cent shareholding.
The group had asked the mainland insurance regulator, the People's Bank of China, to allow Aetna's Hong Kong insurance arm - its 50 per cent owned East Asia Aetna Insurance - to be a partner in the mainland joint venture.
East Asia Aetna is a joint venture between Aetna and Bank of East Asia.
Mr Copeland said East Asia Aetna's involvement would help the group get its mainland operation under way because Bank of East Asia was a strong local bank in the SAR and East Asia Aetna had a good management team.
Mr Copeland said he was confident about development of the mainland insurance market.
China was a developing country and as its middle class expanded, there would be demand for various forms of protection.
'That will create the need for life insurance and other kinds of insurance in the mainland, which will provide huge opportunities for insurance companies,' Mr Copeland said.
It would take six or seven years for the mainland business to break even, which he said was usual for a newly set up life insurance company.
For the future, Aetna would like licences to operate in more mainland cities, such as Shenzhen and Guangzhou.
About 40 per cent of its international profit came from the Greater China region and Southeast Asia. The rest was sourced from Brazil, Mexico, Chile and Canada.
