Foreign insurers are less optimistic than a year ago on expanding their presence in the Chinese market as regulatory restrictions and the robust expansion of domestic peers may stifle growth, according to a recent survey by accounting firm PricewaterhouseCoopers (PwC).
Foreign insurers expect their share in the Chinese life insurance market to grow to just 8 percent over the next three years, compared with the 10 percent market share they forecast in a year ago survey.
Foreign life insurers saw their market share falling after clocking an all time-high of 8.9 percent in 2005. The share slumped to 4.7 percent in the first six months of the year.
The situation for foreign property and casualty insurance companies is more challenging than life insurers. They accounted for just 1 percent of the market in the first half, after staying around 1.2 percent in the previous five years. These firms now expect to achieve a 2 percent market share by 2012.
"Local competitors' capabilities in market exploration and their firm footing in China have been underestimated by insurers from abroad, in particular during the financial crisis," Tom Ling, PwC's partner for assurance sector, said yesterday.
The survey of senior executives from 20 foreign life insurance firms and nine property and casualty insurers showed that established domestic insurers are the main threat, followed by other foreign peers and bank subsidiaries.