American International Group Inc. (AIG) has announced insurance news information that it will be joining other insurers, such as Allianz SE (ALV), in entering into the auto insurance market in China after the rules regarding foreign insurance companies are relaxed.
These insurers are keen to get in the door as quickly as they can to take their portions of the $50 billion dollar marketplace that exists among the drivers in that country. They are waiting for the upcoming lift on the ban that has been blocking companies from other countries from being able to sell the compulsory car insurance policies to Chinese drivers.
AIG is already selling policies in China as a part of its property and casualty business, through Chartis China. The head of that business in Shanghai, Kevin Goulding, stated that the company is looking forward to being able to get started in the new auto marketplace. He explained that “It’s an extremely large market and will also allow us to offer other products to consumers.”
Insurers have been eagerly preparing for this opportunity since the vice president of China, Xi Jinping, visited the United States in February and the announcement was made. This is the opportunity to take the first steps into the largest auto insurance marketplace in the world. Chinese drivers buy an average of 40,000 cars every day.
According to a PricewaterhouseCoopers LLP report published last December, since 2004, the share of premiums for non-property and casualty foreign insurance companies has held at 1 percent since 2004. This change in regulations will likely have a significant impact on that share.