Munich Re’s ERGO-FESCO and BMW (China) approved to set up in Beijing

Munich Re’s ERGO-FESCO Broker Company Limited and BMW (China) Insurance Brokers Co. have received regulatory approval to set up in Beijing.

Li Yunze, head of the National Administration of Financial Regulation, said at the opening ceremony of the annual Financial Street Forum, “To make it easier for foreign institutions to enter the Chinese market, we will speed up and improve the combining of the pre-admission system and the ‘negative list’, which restricts foreign investment in certain sectors.”

The two firms, which have received authorisation to conduct insurance brokerage business, including working on insurance plans for policyholders as well as reinsurance brokerage in the Chinese mainland, are the first to do so in five years.

Li Yunze continued, “The fundamentals of China’s long-term economic prosperity will not change, neither will the banking sector’s stable development.”

He noted that the banking sector is developing steadily, and, over the past three years, “The scale of credit issuance has grown at an average annual rate of 11.2%, around 5% points higher than that in developed countries.”

Li Yunze observed that in the insurance sector, insurance premiums have expanded at a rate of 4 percentage points faster than the global average over the past three years.

This is despite the per capita premium “being just 70% of the world’s average, meaning that there is a lot of room for improvement.” Health, home and disaster insurance have the most potential, he added.

“China will continue to optimize regulatory standards in the insurance sector to enhance its ability to compensate, to guide the life insurance segment to reduce debts and to deepen reforms in automotive insurance, so as to keep unleashing the sector’s potential,” Li Yunze concluded.

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