Boston-based insurance giant Liberty Mutual Group is speeding up preparations to open a wholly owned branch in China, in a bid it will become one of the first non-life insurers to tap the nation's booming insurance market.
The new branch, expected to open within several months, will introduce its non-life products and services to one Chinese city.
However, it has not been determined in which city the company will locate.
"We have been preparing for the branch opening since late last year, when we received the green light from the China Insurance Regulatory Commission (CIRC)," said John Kimber, managing director of China Development under Liberty International, Liberty Mutual's arm in charge of global businesses.
The company has recruited an overseas Chinese to be general manger in charge of the new operations, he said.
Other preparations - including product design, employee recruitment and training - are proceeding well.
Currently, the group offers a wide range of products in the global market - including commercial insurance and services, group products, personal insurance and individual life products.
Liberty Mutual's property and casualty products include automobile, property, general liability, fidelity, surety and crime, financial products and other property programmes.
But it is believed the company will first introduce to China its occupational-safety-related property products.
Better occupational safety and health insurance and education will provide good returns for Liberty Mutual, and rosy benefits for customers, said Tom Leamon, vice-president of Liberty Mutual Insurance Group.
The insurance company has established three safe-work centres - in Fudan University, Chongqing University and Tsinghua University.
Leamon had been invited to Tsinghua University as guest professor with the Department of Industrial Engineering.
As one of the world's leading providers of workers' compensation insurance and programmes, Liberty Mutual said it will join hands with local partners to promote workplace safety and reduce occupational injuries in the country.
But the branch's location has not been finalized, even though the company has filed the documents with regulators, Kimber said.
The company received the nod from CIRC last year to begin preparing for the branch's opening. That approval came nearly two years after Liberty Mutual filed its initial application.
China has promised to allow foreign non-life insurers to open wholly owned operations in five cities - Shanghai, Guangzhou, Dalian, Shenzhen and Foshan - as part of its commitment to the World Trade Organization (WTO).
Liberty Mutual, however, has said it is interested in opening its branch in Chongqing, a business hub in West China.
The company in 1998 established its first representative office in the city, making Liberty Mutual the fist foreign insurer to establish an office in Chongqing.
The move, which could make Liberty Mutual the first foreign insurer allowed to do business in western China, is believed to be a possible shortcut to China's infant insurance market, which is still not fully opened to foreign companies in line with the country's grand western development initiative.
But under China's WTO commitments, foreign insurers are allowed to establish businesses in Chongqing before the end of this year.
No foreign insurers have to date received approval to establish branches in the city.
"We have already filed documents for the opening, and we are now waiting for approval," Kimber said.
He declined to provide further details.
Experts believe Liberty Mutual's branch will be located in either Chongqing or one of the five designated cities.
(China Business Weekly XIAO HUO 01-04-2003)
