The number of overseas insurers operating in the mainland is set to triple within five years and the number of businesses to rise to 50, from 14 today, according to Stuart Leckie, chairman of insurance and pension consultant Woodrow Milliman Asia. Permission to enter the insurance business has been much sought-after by overseas businesses as their governments negotiate deals with Beijing, particularly over terms for accession to the World Trade Organisation. However, although more licences will be issued, difficulties remain and overseas companies will still face problems recruiting good agents to run the businesses. At least seven new licences will be issued to European firms as a result of an agreement between the European Union and the central government. As of the end of this month, Beijing would issue new life-insurance licences to ING Insurance of Netherlands and Assicurazioni Generali of Italy, to allow them to set up life ventures, Mr Leckie said. The other five new licence-holders had not yet been announced, but Mr Leckie said leading candidates would be Standard Life Assurance of Britain, Aegon of the Netherlands and CNP Assurance of France. Beijing would also probably grant general insurance licences to Allianz Group and Gerling, both of Germany. The mainland started to grant licences to overseas insurers in 1991. Only 14 insurance companies have been given licences, however, because mainland authorities not only look at the financial background of the applicants, but at political considerations as well. The mainland authority will issue a licence on a country-by-country basis. That means it will first decide to which country a licence is to be issued, rather than decide on which companies in the countries will be given the licence. The seven new licences to be granted to European insurers were also a political move - part of the mainland-EU agreement for the EU to support the mainland to enter the WTO this year. The seven new players will increase the influence of the European firms in the mainland compared with their US counterparts. At present, the 14 overseas insurers are mainly from the US and Europe. In terms of numbers, more European firms are operating than US companies, even before the seven new licences are included. The Europeans, however, have always complained about the dominant role of US-based American International Group (AIG) in the mainland market. AIG, whose management has a strong relationship with the mainland authorities, is the only insurer with both general and life insurance licences. It is also the only foreign insurer that can operate in more than one city. It has branches in Shanghai, Guangzhou, Shenzhen and Foshan. Other insurers can either do life or general insurance business in only one city - either Shanghai or Guangzhou. Other US firms Aetna and John Hancock, each have one life licence, and Chubb group has a general insurance licence. Canada has two life licences, for Manulife and Sun Life of Canada. Prudential Insurance of Britain has a life licence and Royal and SunAlliance has a general licence. Swiss-based Winterthur has a general insurance licence, while Germany's Allianz Group, and France's AXA has a life licence. Britain's Sedgwick has a broker licence in Beijing. From the Asia-Pacific region, Australia-based CMG Insurance has a life licence, while Tokyo Marine & Fire of Japan has a general licence. After the mainland authority adds the seven licences on the list, the mainland will have 21 overseas insurers. 'Insurance companies will find it much easier to get a licence to operate in the mainland after its accession to the World Trade Organisation,' he said. 'The problem to be faced by the overseas insurers will no longer be getting a licence. Their new troubles will be the lack of quality local agents and insurance experts to run their mainland operations.' Woodrow Milliman Asia, which offers consultancy services to insurers and pension companies, planned to open an office in Shanghai in addition to its Hong Kong office, in a bid to capture mainland business opportunities, Mr Leckie said. He said that after the mainland entered the WTO, Beijing would gradually change its country-based licence policy, which would speed up the licence process. 'The mainland authorities will gradually follow the international practice of issuing the licences according to the financial background and experience of the insurer, rather than which country they are coming from,' Mr Leckie said. This would allow any strong insurers to apply to operate in the mainland, which would boost the quality of the market. 'All the largest insurance companies in the world would try to get into the mainland insurance market to try to capture its 1.3 billion population as their clients,' he said. 'I don't think any international insurance company would like to miss such a huge business opportunity,' he said.