Mercer launches insurance JV in China
Maggie Zhang
2006-04-26
MERCER Human Resource Consulting, the world’s biggest insurance broker, launched a joint venture in China yesterday.
The venture, Shanghai Mercer Insurance Brokers Co Ltd, offers health-care benefits and advisory services to organizations in China. Mercer refused to identify its JV partner, saying it is awaiting the Chinese firm’s approval to disclose the information.
“We are ambitious and optimistic about the market and our business will grow rapidly,” said Edouard Merette, Asia-Pacific president of Mercer. “The potential is enormous as it’s still in the initial stages of the market in China.”
China’s insurance premiums topped 493 billion yuan (US$62 billion) last year. Premiums collected from the country’ insurance brokers were at about 10 billion yuan, accounting for a mere 2 percent of the total.
Considering the 2 percent figure, the insurance broker sector enjoys big growth potential, said Rosaline Chow Koo, regional business leader of Mercer Health & Benefits Asia. She also said China will be the fastest-growing market for the company.
The venture has 10 employees to start. But Merette said it will grow into the “thousands” in a fairly short period.
The US-based company holds a 24.9 percent stake of the venture, just under the 25 percent maximum a single foreign investor is allowed by regulators in the insurance sector. Its unidentified Chinese partner holds the remainder.
The China Insurance Regulatory Commission granted the license for the venture late last year with registered capital of 10 million yuan.
China is boosting its commercial insurance sector to partly absorb the nation’s US$1.8 trillion in household savings. Authorities want to increase combined insurance assets to 5 trillion yuan by 2010 from 1.6 trillion yuan at the end of March.