Reuters News Agency, George Chen, 10 October 2006
Manulife Financial Corp. is preparing to sell insurance in 40 Chinese cities by 2010 and is looking to start a money management venture as business is booming.
Total premiums for Manulife-SinoChem Life Insurance Co. Ltd., the Toronto-based company's 51-per-cent-owned China joint venture, should be more than 840-million yuan or $120-million (Canadian) this year, up 20 per cent from 700 million yuan in 2005, Emil Lee, chief financial officer of the insurance venture, said in an interview.
Manulife, which owns the John Hancock Mutual Funds group, was talking to Chinese regulators about setting up an asset management joint venture in China, Mr. Lee said.
"China's market has very high potential and is probably the fastest growing market in Asia [for Manulife]," he told Reuters.
The growth is coming off a low base, though: The China venture's premium income makes up around 1.5 per cent of Manulife's total.
"We have very high hopes in China . . . I think the premium growth of the company will definitely be in the double digits every year" in the next three to four years, said Mr. Lee, a Hong Kong-born Canadian.
Manulife plans to double its China sales outlets to about 40 cities by the end of the decade, Mr. Lee said. It wants to hire about 2,000 new direct sales agents in 2007, increasing the total number to about 7,000.
"Insurance sales agents are so far our single distribution channel so they are our [premium] growth engine," Mr. Lee said.
"We are also looking into some alternative channels such as telephone sales and bank insurance, but I think to hire direct sales agents is still the most efficient way for us," he said, adding that banks currently charge too much in distributing fees.
Manulife-SinoChem was established in 1996 after becoming the first joint venture in China's life insurance industry to be approved by Beijing.
Insurance joint ventures in China generated a combined 32.4-billion yuan in premiums in 2005, with Manulife-SinoChem ranking as the third-largest life insurance venture, according to official data.
Most analysts still regard China as an infant market for life insurance business, as less than 4 per cent of China's 1.3 billion people have coverage. The sector is expanding fast as Beijing dismantles a cradle-to-grave welfare system.
Foreign players, including U.S. giant AIG, have dived into China's insurance markets in the last decade, attracted by the pool of personal savings totalling over $2-trillion in the world's fourth-largest economy.
Mr. Lee said Manulife will focus on the retail insurance market in China, but the life insurance joint venture has been in talks with its Chinese partner SinoChem Corp., for the possibility of some sort of corporate insurance.
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Manulife Financial Corp. is preparing to sell insurance in 40 Chinese cities by 2010 and is looking to start a money management venture as business is booming.
Total premiums for Manulife-SinoChem Life Insurance Co. Ltd., the Toronto-based company's 51-per-cent-owned China joint venture, should be more than 840-million yuan or $120-million (Canadian) this year, up 20 per cent from 700 million yuan in 2005, Emil Lee, chief financial officer of the insurance venture, said in an interview.
Manulife, which owns the John Hancock Mutual Funds group, was talking to Chinese regulators about setting up an asset management joint venture in China, Mr. Lee said.
"China's market has very high potential and is probably the fastest growing market in Asia [for Manulife]," he told Reuters.
The growth is coming off a low base, though: The China venture's premium income makes up around 1.5 per cent of Manulife's total.
"We have very high hopes in China . . . I think the premium growth of the company will definitely be in the double digits every year" in the next three to four years, said Mr. Lee, a Hong Kong-born Canadian.
Manulife plans to double its China sales outlets to about 40 cities by the end of the decade, Mr. Lee said. It wants to hire about 2,000 new direct sales agents in 2007, increasing the total number to about 7,000.
"Insurance sales agents are so far our single distribution channel so they are our [premium] growth engine," Mr. Lee said.
"We are also looking into some alternative channels such as telephone sales and bank insurance, but I think to hire direct sales agents is still the most efficient way for us," he said, adding that banks currently charge too much in distributing fees.
Manulife-SinoChem was established in 1996 after becoming the first joint venture in China's life insurance industry to be approved by Beijing.
Insurance joint ventures in China generated a combined 32.4-billion yuan in premiums in 2005, with Manulife-SinoChem ranking as the third-largest life insurance venture, according to official data.
Most analysts still regard China as an infant market for life insurance business, as less than 4 per cent of China's 1.3 billion people have coverage. The sector is expanding fast as Beijing dismantles a cradle-to-grave welfare system.
Foreign players, including U.S. giant AIG, have dived into China's insurance markets in the last decade, attracted by the pool of personal savings totalling over $2-trillion in the world's fourth-largest economy.
Mr. Lee said Manulife will focus on the retail insurance market in China, but the life insurance joint venture has been in talks with its Chinese partner SinoChem Corp., for the possibility of some sort of corporate insurance.
