HSBC Life Insurance Co Ltd, a joint venture between HSBC Insurance (Asia) Ltd and Beijing-based National Trust, started operations yesterday in Shanghai, as part of its move to tap into the fast-growing mainland insurance market.

The new 50-50 joint venture will roll out life, pension and medical insurance products through a bancassurance partnership with HSBC Bank, Hang Seng Bank, and Bank of Communications.

The company will also recruit 180 sales agents to undertake distribution activities.

China, with a growing number of affluent people still has low insurance penetration and hence offers immense growth potential, said Peter Wong, group general manager of HSBC yesterday in Shanghai, adding that it will target the burgeoning affluent and high-net-worth customers.

According to figures compiled by the China Insurance Regulatory Commission (CIRC), life insurance premiums in the country was up 48.3 percent to 733.8 billion yuan in 2008, making it the second largest insurance market in Asia after Japan. But the insurance penetration is still low at 3.3 percent, compared with 18 percent in the United Kingdom.

HSBC Life, which got CIRC approval in June, has a registered capital of 500 million yuan. The company said it would seek operating licenses for other cities in phases.

HSBC Group's insurance profits of US$1.2 billion in the first half of 2009 represented 16 percent of its global profits. Its insurance business in Asia made profits of around US$550 million and accounted for 44 percent of the total profits.

(China Daily August 28, 2009)