Canada's Sun Life eyes China expansion
(Agencies)
Updated: 2004-06-22 15:36

Canada's insuranceFinancial Inc hopes to open more branches in China next year to profit from the nation's fast growing insurance market, its chief executive said on Monday.

The Toronto-based firm, which has run a joint venture with China Everbright Group Ltd in Tianjin for two years and opened a joint venture branch in the capital Beijing in April, would seek approvals to expand its business in coming months. "I would see us perhaps expanding cities in 2005 and that would be congruent with regulatory approvals," chief executive officer Donald Stewart told a news conference.

The company, which had earmarked a potential C$100 million (US$73 million) to invest in China from the outset, was eying expansion in the fast-growing Yangtze River Delta area which includes the relatively wealthy financial hub Shanghai.

Stewart declined to name specific cities or to divulge investment figures. No figures for the firm's investment in China to date were readily available.

China has so far opened at least 15 cities to foreign insurers in line with pledges made when it entered the World Trade Organization in late 2001.

Beijing has pledged to phase out geographical restrictions on foreign insurers by the end of 2004 and allow foreign insurers into group, health and pensions by the end of 2006.

Domestic insurers still dominate the market, but that has not put off foreign insurance giants eager to tap growing demand from ordinary Chinese for insurance, fuelled by the government's dismantling of a cradle-to-grave welfare and pension system.

Sun Life's joint venture was not yet making profits but the Canadian firm remained committed to what Stewart described as a big growth market in the long term.

It typically took six to eight years to reap profits from new ventures, executives said.

Premium income from the two year old Tianjin operation had hit 140 million yuan (US$16.9 million) in 2003, said joint venture president Timothy Chen.

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