Les assureurs étrangers face à leurs difficultés en Chine - Evernote

Les assureurs étrangers face à leurs difficultés en Chine
International insurers who launched business in China several years ago are questioning
today.
They initially expected a lot on the Chinese insurance market in the wake of the country's
accession to the WTO in 2001. However, today, foreign insurers’ business situations seem
harder than anticipated. The difficulties they encountered are considerable; In addition to the
problems concerning any investment on an unknown territory, they have to dealing with such
difficulties as undeveloped insurance market and unfriendly regulation which is really
restrictive and even discriminatory in some way. All those problems and difficulties result in a
poor performance of the foreign insurers: only 5% of market share for life joint ventures, and
1% for non-life subsidiaries.
The paradise that China should be for the foreign insurers seems to be proved to be a
challenging zone; disappointment is obvious!
So what is the right reaction? Should we consider going to China is a mistake, giving up this
market and focusing on more friendly areas? Or should we persist and wait for "better
days"? Should we instead adapt the penetration strategy of the Chinese market for a better
integration with the environment which had been previously under-evaluated?
To give the right response at hand, foreign companies should review the situation with fresh
eyes: is the situation really extremely tough for them? No; wherever in the other markets in
the world, it is not easy to prevail as a foreign insurance company. No; if we evaluate the
performance of foreign companies in the right scope.
Therefore, success appears possible in China for foreign insurers:
- If they regard their failure as a result of bias and mistakes (especially of the evaluation of
the competition of local insurers that are far more competitive than expected, and of such
major challenges as regulatory which is tougher than anticipated).
- If they adjust their strategies to the structural conditions of the Chinese environment,
namely, size, long-term perspective, and adaptation to the nascent Chinese insurance
model.
- If their values are consistent with those which are required to establish trust with all the
stakeholders in the market, namely, humility, patience and perseverance.
Thus, according to these factors, the foreign insurers may decide to leave, or stay. If they
stay, they also may conceive a new strategic approach in order to "stick" to the new powerful
Chinese market’s dynamics which are ultimately favorable to foreigners (trends such as
“bancassurance” and the continuing opening regulatory). Then the proper use of the strategic
tools (the allowed legal forms), including the minority stake in a Chinese company, will
enable foreign insurers to succeed.
CNAM IIM Ŕ ENASS MBA Manager d’entreprise d’assurance Florimon DELALANDE 6