Taiwan's largest life insurer Cathay Life Insurance Co (
"China's insurance sector is a fast-developing market of scale ? which has seen a compound annual growth rate of over 37 percent in the last 10 years," Lee Chang-ken (
The country's life insurance market is expected to have a lot of room for growth in the future, he said, citing that annual premiums in China are equivalent to around 0.7 percent to 0.8 percent of its gross domestic product (GDP), compared to 7 percent of GDP in Taiwan.
The insurer expects both the percentage and the GDP base to expand, making it a sizable market over the coming years, Lee added.
Foreign players currently hold a 3 percent share of China's insurance market, with local insurers accounting for the rest, Lee said.
He shied away from giving the company's projections for market share or a timeline for when the business would break even.
Cathay Life, which has a one-third share of the nation's market, generated NT$531.3 billion of revenue last year, up 11.87 percent from the year before.
The company broke into China's insurance market through a joint venture -- with paid-in capital of 800 million Chinese yuan (US$96.7 million) -- with China Eastern Airlines Co (中國東方航空), a top-three airline in China.
The airline, which possesses 47.3 billion Chinese yuan of assets and 25,000 employees runs 10 wholly-owned firms and 18 holding companies in the aviation, finance and food industries, and is planning to evolve into a comprehensive business bloc.
A market watcher yesterday expressed a positive view on Cathay Life's expansion, saying it could be a model for its peers.
The venture currently has 10 kinds of life insurance products currently to lure individual customers, and is seeking to expand its business to bank insurance, and also to group insurance, targeting China-based Taiwanese enterprises and local companies.
"[The company's move] can be an indicator for the nation's financial sector, as its subsidiary is the first Taiwanese company to practically operate a business in China, while other financial institutions -- including banks and insurers -- have only set up offices with limited
Forming partnerships with local players is a workable model for other interested Taiwanese financial firms to branch into China's market, he said, adding that China Life Insurance Co (