BEIJING (XFN-ASIA) - US life insurers see tremendous market potential in China's combination of strong savings, low penetration rates for insurance products, and an underdeveloped pension industry, according to Frank Keating, the chief spokesman for the US life insurance industry.
Keating, president and CEO of the American Council of Life Insurers (ACLI) and a former governor of Oklahoma, told a news conference that China, like the US, has a large, greying population, but a much higher savings rate, at 50 pct of income.
Keating added he also sees China's potential in terms of the 50 bln usd in 2005 premium income realized by US insurers in Japan, a similar high-savings country with a much more developed industry. In China, US life insurers had premiums of 1.5 bln in the same period.
He said his first visit to China in his capacity as ACLI head will focus on persuading China to continue opening its life insurance sector to foreign competition for the benefit of consumers.
'What we want in China is transparency, equal treatment (with local rivals), better licensing and regulatory processes and also fairer capital requirements. Delays and further bureaucracy hurt the Chinese consumer, and more competition and free trade is in the best interests of China,' Keating said.
He said he was taking a non-confrontational approach with the Chinese insurance sector representatives during his visit, while continuing to advocate market liberalization in providing maximum benefits to consumers.
'Our message here is a gentle, chiding one. It's a new market here and there is still not alot of understanding,' he said, adding that one of his key objectives was to lift the 50 pct ceiling on foreign stakes in Chinese life insurers.
When asked by XFN-Asia about his views on US Senators Charles Schumer's and Lindsey Graham's bid to levy tariffs on China in the absence of significant currency flexibility, Keating said he believes the Schumer-Graham bill's passing is in neither trade partner's interest.
He said Schumer has told him he hopes China decides to strengthen its currency in order to make his bill unnecessary, with Schumer viewing the measure to be more a gesture of US frustration rather than an attempt to punish China.
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