The
Inauguration of SFLI Attracts Attention
from Inside and Outside the Industry
-- Bank
insurance companies
explore new channels
Source: Economic Daily
News Author: Yuqing
Cui
Date: 4 Apr,2006 Sino-French Life Insurance Company
recently listed to start operation. Being regarded as an enterprise of
¡°bank
insurance system¡±, SFLI has draw attentions from inside and outside of
the
industry from its opening. ¡¡¡¡Brand advantage of ¡°Leaning
upon a big tree¡±
Sino-French Life Insurance
Co., Ltd. is a joint venture established by China Post and French
National Life
Insurance Company (CNP Assurance) together with a registered capital of
200
million yuan, each side held 50%.
As
a shareholder, China Post is as parent company to contribute the
capital on
behalf of its underling Post Saving Bureau which is expected to set up
postal
savings bank. Thus, many insiders believe that in the condition of
capital
marriage, SFLI has provided with the substance of bank insurance
company.
In the following week of
its set up, SFLI products are not yet to be seen in Chuiyangliu post
office and
Jingsong district one post office in Chaoyang district. Two types of
Taikang
Life and Pacific Life¡¯s investment insurance products are still placed
on the
counter. However, it is obviously that the postal outlets all over the
country
will become the ready-made sales channels for SFLI. According to
research, the
premium income of postal deputy all over the country reaches 22 billion
yuan last year, of which 95% comes
from
life insurance business. SFLI will face the
competition with those companies that have established trade
relationship with
China Post, which is different from CNP that enjoys exclusively the
channels of
French Post. But 77000 post saving outlets will be the primary
predominance for
SFLI.
¡°In
view of international
experience, the strongest strength of bank insurance company is that
the
insurance business can take advantage of bank¡¯s customer resource and
channels.¡± Zhong Chunping, post-doctor of South Western University of
Finance
and Economics, said to reporter, ¡° And at home, a good reputation of
bank has
great attraction for insurance business.¡±
¡°The abundant resource of
bank itself, along with great development potential of outback
insurance
industry stimulate bank insurance business. ¡± said Feng Qi, the
business
department GM of Bank of China Insurance Co., Ltd. In January 2005,
Bank of
China Insurance Co., Ltd., which is a wholly-owned subsidiary
organization of
Bank of China Co., Ltd., was officially established. Bank of China
Insurance
Co., Ltd ¡°strives to achieve the bank and insurance products depending
on the
numerous organization network and customer resource of Bank of China,
and
characterized in the brand new bank insurance. ¡±quoted speech of Bank
of
China¡¯s
spokesman. In just one year after establishment, Bank of China
Insurance CO., Ltd
successfully participate in some large business insurance projects,
such as
FY-2 C satellite, Asia and Pacific-6 satellite, Beijing-1 satellite,
Tianjin
subway, Celanese Nanjing, Shanxi Taiyuan Iron and Steel etc., showing
its good
growth momentum and strong competitiveness. ¡¡¡¡ Active attempt
on ¡°marriage¡± of bank and insurance It is recognized by many
media that SFLI is the ¡°first bank insurance company¡±. In fact,
however,
marriage of bank and insurance exists long ago. In practice, bank insurance
company appears in succession in different format of capital formation.
In the
framework of laws and regulations, the existing bank insurance
companies can be
divided into two categories: one is complete capital relation, such as
the Bank
of China Insurance, which is a wholly-owned subsidiary company of BOC
Hong Kong
Holding Limited., and is registered in Hong Kong special administrative
region;
the other is part capital relation, which participate in an insurance
company
through its parent company or equity-owned insurance agencies. The
newly
established Sino-French Life Insurance company belongs to the latter
type.
It was known that at
present, domestic commercial banks were trying actively new
bancassurannce
pattern. For this thriving trend, FengQi
of BOC Insurance analyzed, on one hand, Chinese insurance market had
great
potential, not only banks, but also some big industry companies had
dabbled in
insurance industry; on the other, as to establishment of outlets,
insurance
organizations were far less than widely covered banking outlets.
Insurers
intended to make use of well developed channel of banks. In fact, apart
from
setting up insurance companies or equity participation, almost every
bank had
signed cooperation or sales agreements with related insurance
companies. This
was a popular model of bank insurance business. Bank of communications
had a
quick pace in this respect of bancassurance business. Feng Hong, senior
manager
of Business Department of Bank of communications¡¯s Beijing Office said
to the
reporter,¡°Bank of Communications itself was a mixed operation company
whose
business comprises insurance. To adjust to financial reform,the
business was
separated. Bank of Communications has advantages in the respect of
insurance
business,¡±she said,¡°related approval for establishment of insurance
company is
in process.¡±she especially pointed out that,¡°if approved, the insurance
company
to be established will become an important attempt of financial mixed
operation
of our country.¡±Obviously, Bank of Communications has confidence in the
insurance company of ¡°bank lineage¡± to be set up. Insiders thought, banks set
up professional insurance companies or share stocks of insurance
companies in a
certain way, promote profound cooperation through organizational
innovation, it
could be a breakthrough of bancassurance business.
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