Shin Kong Financial seeking opportunities in China

Shin Kong Financial Holding Co (新光金控) is seeking opportunities to set up a life-insurance joint venture in China because the domestic market is saturated, according to the company's president.

"We have been very actively looking for a partner to set up a joint venture in the coastal areas of China," Frank Cheng (鄭弘志) said in a recent interview.

Shin Kong Financial, which owns Shinkong Life Insurance Co (新光人壽), Taiwan's third-largest life insurer by premium income, plans to set up a life insurance company in China with an initial capital of 800 million yuan (US$99.6 million), Cheng said.

Taiwan life insurance companies are looking to the Chinese market to increase policy sales as the domestic market matures.

The two largest life insurance companies in Taiwan by premium income are Cathay Life Insurance Co (國泰人壽) -- the core unit of Cathay Financial Holding Co (國泰金控) -- and the unlisted Nan Shan Life Insurance Co (南山人壽). The pair, together with Shinkong Life, account for more than half of Taiwan's life insurance market in terms of total premiums.

Taiwan has the second highest ratio of insurance premiums to gross domestic product -- 14.13 percent in 2004 according to data from Swiss Reinsurance Co.

China's was below 4 percent, making it a market with a huge growth potential yet to be tapped, analysts say.