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SCMP Reporter

Zurich Financial Services Group, Europe's fourth-largest insurer by market value, is in talks with China's insurance regulator to secure a property insurance licence in Shanghai, the company said yesterday. 
The Shanghai subsidiary would be the Swiss insurer's second wholly owned unit on the mainland, after it set up a unit in Beijing in 2007.
'The government is doing everything to gradually open up the market to make competition equal and fair,' said Zurich Financial chief executive Martin Senn. 'We are looking to grow our business through organic growth.'
Foreign insurers are now allowed to open their own non-life insurance units on the mainland, but they can operate a life insurance business only through local joint ventures.
Beijing has become more cautious about allowing the expansion of overseas insurers because of concerns about their solvency as a result of the global financial crisis.
Johnny Chen, Zurich Financial's chief executive for Greater China and Southeast Asia, said it had no timetable for when it would be granted a licence to set up a Shanghai branch.
Zurich Financial's efforts to expand in China are in line with its ambition to increase Asia's contribution to its global revenue to 20 per cent from the current 7 per cent.
Zurich Financial currently owns 20 per cent of New China Life Insurance, the country's fourth-largest life insurer, which has an 8 per cent market share nationwide. Chen said the major shareholders of New China Life - including Zurich Financial, Central Huijin, an investment unit of China's US$300 billion sovereign wealth fund, and steelmaker Baosteel - were considering raising funds to boost the company's growth.  
'The life insurance business requires lots of capital,' he said. 'We are actively in discussions on how to raise new funds for the insurer.'
He did not elaborate on the fund-raising plan. New China Life is not yet listed on a stock market. 
Zurich Financial also launched a US$3 million research and development centre in Shanghai's Pudong district, which will help it explore marine insurance and risk management opportunities in the city.
Zurich Financial last month said its operating profit rose 8 per cent in 2009 to US$5.6 billion. Net income increased 6 per cent to US$3.2 billion.



Zurich Financial in talks for Shanghai licence