American International Group, Inc. and Liberty Mutual Group have each been been granted approval by the China Insurance Regulatory Commission (CIRC) to establish a wholly owned subsidiary in China.
AIG said that its subsidiary, AIU Insurance Co. (AIU), has been granted the approval. The new subsidiary, or Wholly Owned Foreign Enterprise (WOFE), will be named AIG General Insurance Co. China, Ltd. (AIG General).
In accordance with CIRC and other government requirements, AIG General will be headquartered in Shanghai, and the existing AIU branches in Shanghai, Guangdong and Shenzhen will be consolidated into AIG General.
Liberty Mutual Group said its China subsidiary will be called Liberty Insurance Co., Ltd., and will be headquartered in the city of Chongqing, where the company has had an office since 2003.
AIG said that the subsidiary license and subsequent branch conversion will permit AIG General to expand its general insurance capabilities, achieve operational and capital efficiencies, and, with regulatory approval, provide a platform to establish new branches in other areas of China over time.
“The license is a significant milestone for AIG and further strengthens our commitment to China,” commented AIG President and CEO Martin J. Sullivan. “As the world’s fastest growing economy, China continues to present great potential for AIG. We look forward to contributing to the economic growth and success of this market where AIG has had a long history, dating back to 1919, and where it became the first foreign insurance organization to receive a license to operate in 1992.”
Olin Wethington, chairman of AIG Companies in China, added that AIG General wil enable the insurer to make more contributions to the development of the non-life insurance market in China.
Liberty Mutual said the license would allow it to expand its general insurance capabilities, including coverage for individuals and small and medium size businesses.
“A company can’t view itself as truly international without a strategy for conducting business in China,” said Edmund F. Kelly, Liberty Mutual Group chairman, president and CEO. “We have experienced strong growth in our international operations and view China as an integral component of our worldwide strategy. We appreciate everyone’s efforts and the attention CIRC has given to the licensing process.”
Liberty Mutual has had a presence in China since 1996 when it opened a Safety Representative Office in Shanghai. In 1998, Liberty Mutual opened its first Insurance Representative Office (IRO) in Chongqing, and in 2000 opened another IRO in Beijing.
In December 2003, Liberty Mutual opened a branch operation in Chongqing, located in the western part of China, to provide insurance to foreign businesses operating in China and personal accident insurance to individuals. In June 2005, Liberty Mutual’s Chongqing office wrote its first auto insurance policy.
Sources: Liberty Mutual Group
www.libertymutual.com
AIG
www.aig.com
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