Fri, Oct 06, 2006 - Page 12 News List

Shin Kong Life to set up Chinese joint venture next year

By Amber Chung  /  STAFF REPORTER

Shin Kong Life Insurance Co (新光人壽) expects to set up a joint venture in China early next year to tap the insurance market across the Strait, a company official said yesterday.

"We are in talks with a Chinese company for the moment and hope to ink a contract with them early next year," Frank Cheng (鄭弘志), president of parent firm Shin Kong Financial Holding Co (新光金控) at a lunch meeting.

Shin Kong is among the top three life insurers in the country, with a market share last year of 10.9 percent in terms of total premium.

Beijing or Shanghai

Cheng declined to name the potential partner, citing confidentiality, but said that the firm was considering establishing a subsidiary either in Beijing or Shanghai.

In July last year, Shin Kong Life said it planned to form a life insurance venture in China and was in final talks with a Chinese company.

At the time, the company's president, Pan Po-cheng (潘柏錚), said Shin Kong Life planned to invest 400 million yuan (US$50.6 million) in the joint venture while its partner would provide matching funds.

Under Chinese regulations, foreign insurers are required to team up with local companies to break into the domestic insurance market.

Insurers from Taiwan are eyeing the Chinese market because the home market is already saturated. Additionally, an estimated 1 million Taiwanese live and work in China, where Taiwanese investments have reached an estimated US$150 billion.

Cathay Life first

Arch rival Cathay Life Insurance Co (國泰人壽), Taiwan's largest life insurer, made inroads into China in January last year by forming a joint venture with Beijing's state-run China Eastern Airlines Corp (東方航空), making it the first Taiwanese life insurer to set up operations across the Strait.

For the first nine months of this year, Shin Kong Life posted revenues of more than NT$48 billion (US$1.45 billion) from sales of new policies, up more than 20 percent from a year ago.

The company has accordingly raised its revenue target from NT$50 billion to NT$60 billion.

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