Hangzhou - Liberty Mutual Insurance Co, the fifth-biggest foreign insurer in China, made another stride on Wednesday into China's insurance market, at a time when most overseas insurers are re-examining their business models in the face of stagnant growth.
The company, whose business focuses on auto, home and life insurance, launched its third Chinese subsidiary in Hangzhou, Zhejiang province, just one year after setting up a Beijing branch.
The Hangzhou branch will focus on providing personal insurance, especially car insurance, and insurance for small- and medium-sized enterprises, the company said at a news conference on Tuesday.
Jackson Tang, chief executive officer of Liberty Mutual Insurance China, said the company, which entered China in 1996, will continue to open a branch in China every 18 months, the minimum time needed to go through the regulatory process for opening a branch, to gain market share in the country.
"For us, China is one of the markets that has the greatest potential, given its stable and rapid economic growth and its high deposit rate. Our business in China will grow 60 to 65 percent this year, and we expect the momentum to keep going in the future," said Tang.
Liberty's prosperous Chinese business sets it in stark contrast to its fellow foreign insurers in the country.
Most foreign insurers in China have been struggling after being hit hard during the financial crisis. And the entry of major Chinese banks into the insurance market in recent years, combined with strict government regulations, has also squeezed their market share.
According to a survey released by Pricewaterhouse-Coopers (PwC) last week, 31 foreign insurers polled expect their combined share of the Chinese market to remain around 5 percent in the next three years, while the property and casualty insurers say their market share will stay around 1 percent.
Tom Ling, an insurance industry leader at PwC China, said that some foreign partners are even considering diluting their shareholdings and looking towards domesticating their operations.
Edmund F. Kelly, chairman and chief executive officer of Liberty Mutual Insurance, attributes his company's good performance in China to "full commitment and better knowledge of the Chinese market and consumers" as well as a different development strategy than other foreign insurers.
He said most of the company's employees in China are locals who know the Chinese market and regulatory structure better, while other foreign insurers prefer employing foreigners.
The company also bypassed Shanghai to set up branch in Hangzhou to avoid fierce competition. "Shanghai is a place where everybody is, but in Hangzhou, we are the only one," he said.
