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China Life, the largest life insurer in the country, is to speed up its transition to a financial conglomerate by establishing both a property insurance company and a pension insurance firm in the near future.
"China Life is now accelerating the preparatory works for the establishment of the property insurance company and a pension company," said Yang Chao, newly appointed general manager of China Life, a mainland-based firm listed both in Hong Kong and New York.
This will be another milestone measure taken by the insurer to further diversify its business structure and minimize risks following the establishment of China Life Insurance Asset Management Co - a subsidiary launched in late 2003 to manage China Life's and parent China Life Group's huge pool of funds.
But Yang, in his first staff meeting open to reporters, did not clarify the final timeline for the establishment of the insurance businesses.
Other streamlining measures, according to Yang, include boosting its image and adopting international standards to improve performance and service quality.
The company announced yesterday it would adopt the international quality awards (IQA) and international awards for productivity (IAP) recognition and award programme for its 5,000-plus agents in Shanghai to make them more accountable, and to fall in step with international standards.
As a key strategy in its drive to expand in larger cities, the programme, started as a pilot in Shanghai, is scheduled to be expanded to other major targeted regions next year, according to China Life and LIMRA International, the institution that designed and implements the programmes.
This is the first time a Chinese life insurer has adopted the standards for its daily management. Chinese life insurer Ping An previously adopted just one of the standards.
"IQA and IAP are designed as an encouragement of sales quality and performance we hope that the sales could help Chinese life insurers to improve their performance in a persistent way," said Robert Kerzner, president and chief executive of LIMRA International.
These measures are to further cement China Life's flagship position in the domestic market, according to Yang.
As one of the most developed insurance markets in China, Shanghai is home to white-hot competition, with both domestic giants and foreign rivals striving to gain a slice of the action.
China Life's Shanghai business fell behind Ping An and was closely chased by foreign giants like AIA last year. Regaining its dominant position is one of the firm's priorities.
The insurer is also keen to sell its 51 per cent stake in the China Life-CMG Life Assurance, a 51-49 per cent joint venture life insurer with Australia-based CMG, and side step huge potential losses on stock market investments.
China Life vowed in 2003, as it prepared for an IPO, to sell its stake in the joint venture within three years of its listing on an overseas market. Previous media reports said the company will sell its stake to a large State-owned company before the end of the year. But Yang neither confirmed nor denied this plan.
(China Daily June 23, 2005)
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