Although dozens of foreign insurance giants have opened branches in China, new players continue to enter the nation's booming, but underdeveloped, market.

Two more insurance giants, with different business orientations, recently announced their plans to tap the world's most populous nation's market.

Unlike most of their rivals, who decided to sell accident and/or health-care policies via agents, the two newcomers appear prepared to introduce their unique methods and products into China.

Their aims: Rapid penetration into the local market.

AVIVA-COFCO Insurance Co, a joint venture between British insurance firm AVIVA and China National Cereal, Oil and Foodstuff Import and Export Co (COFCO), last week announced plans to cooperate with Beijing Jiaxin Insurance Agency.

The deal will allow Beijing Jiaxin to write AVIVA-COFCO's policies in the greater Beijing area.

Through Beijing Jiaxin's 3,000-plus insurance agents, AVIVA-COFCO will have more rapid, efficient access to potential buyers in China before it establishes its distribution networks.

AVIVA-COFCO last week received Chinese authorities' approval to sell policies in Beijing.

But unlike its rivals, who have preferred to establish their own sales networks, AVIVA-COFCO chose to outsource its sales to professional agents -- including banks.

AVIVA-COFCO officials said the firm will introduce to Beijing about 20 products -- ranging from long-term savings-type policies to accident and health-care insurance -- currently available in Guangzhou.

AVIVA-COFCO opened its first China branch in Guangzhou, capital of South China's Guangdong Province, in January 2003.

That office is currently the firm's headquarters in the nation.

AVIVA-COFCO is pondering moving its headquarters to Beijing.

"We are still considering it," said Eric Chang, AVIVA-COFCO's president.

He declined to elaborate.

Sixteen life insurers and 10 property insurers have opened business units in Beijing. In China, only Shanghai has more offices of insurance firms than the capital city.

During the year's first half, overall premiums increased 0.45 per cent, year-on-year, to 15.06 billion yuan (US$1.81 billion) in Beijing.

But life insurance premiums dropped 4.36 per cent, year-on-year, to 11.63 billion yuan (US$1.40 billion).

That marked the first decrease in life insurance premiums in the capital in more than 10 years.

"The insurance market (in Beijing) is still not competitive enough, and many areas are still untapped," said Chang.

AVIVA-COFCO's revenues topped 40 million yuan (US$4.83 million) last year in Guangzhou, which was "pretty good" for the first year, Chang said.

The company plans to expand to Chengdu, capital of Southwest China's Sichuan Province, this fall. Next year, the firm plans to open branches in two other Chinese cities.

In addition to the deal with Beijing Jiaxin, AVIVA-COFCO has signed a contract with another agent --National Insurance Agent -- to sell its products in Beijing.

AVIVA-COFCO has also signed a deal with Huaxia Bank -- a medium-sized commercial bank -- involving the distribution of its banking insurance products.

Banking insurance products make up roughly 40 per cent AVIVA's sales in the United Kingdom.

Those policies will be available in the bank's outlets in Beijing this week.

"We will establish our own team of agents, but it will take time, and our co-operation with Beijing Jiaxin will be a long-term deal," said Rex Tung, general manager of AVIVA-COFCO's Beijing branch.

Unlike AVIVA-COFCO, KYOBO Life Insurance is preparing a more aggressive strategy for the Chinese market.

South Korea-based KYOBO Life Insurance Co, the 15th-largest life insurance firm in Asia, is preparing to establish a joint venture life insurance company in China, to tap the nation's huge educational insurance market.

But the debut of its business could be years away, as it has not received approval from Chinese authorities.

If successful, China will be the South Korean firm's first foray into an overseas life insurance market. KYOBO was founded in 1958. The company has established an asset-management firm in the United States.

KYOBO is searching for possible partners in China.

Foreign life insurance companies have traditionally selected either a large State-owned enterprise or a domestic insurance company when establishing a 50-50 joint venture in China.

Kumjoo Huh, chief representative of KYOBO's Beijing office, said the firm is allowed to file documents for a joint venture late next year.

China's current regulations allow a foreign insurer to apply to establish a life insurance joint venture two years after it has established a representative office in China.

KYOBO will name its joint venture partner in 2006. "We are scheduled to offer policies to our customers in 2007," Huh said.

The company will introduce its educational policies to students.

Nearly one-fourth, about 433 million, of China's approximately 1.3 billion residents are enrolled in schools or universities.

Selling education-related insurance policies has been lucrative for KYOBO in South Korea, Huh said.

Huh said KYOBO is considering buying stakes in Chinese rivals. If successful, it will enhance its penetration into the Chinese market.

Those plans, however, remain in the preliminary stage, Huh said.

(Business Weekly August 17, 2004)