Nation has become world's second-largest insurance market after the US thanks to reform and opening-up policies
Foreign insurance companies have witnessed rapid growth of business in China over the past 70 years, as the country has expanded market access for foreign investors, especially in the financial services sector.
Tracing its roots back to 1919 in Shanghai, when entrepreneur Cornelius Vander Starr began an insurance business, AIA applied for a life insurance license in China in 1990.
For almost a year after the application, AIA did not receive any regulatory response, but things changed after former Chinese leader Deng Xiaoping delivered a series of speeches during visits to several southern cities at the beginning of 1992.
The speeches played a key role in guiding China's reform and opening-up. As a result, the company obtained a license on Sept 25, 1992 and started operations in Shanghai, following many rounds of negotiation.
"AIA has benefited from the opening of China's financial sector regarding our return to the Chinese mainland. Ever since then, our development has benefited directly from the continuous opening of China's business environment. In recent years, we have clearly felt that the government is accelerating steps toward further opening-up," said Fisher Zhang, CEO of AIA China.
The insurer's new sales and service centers in Tianjin municipality and Shijiazhuang, Hebei province, commenced operations at the end of July, under regulatory policies promoting synergistic development of the insurance sector in Beijing, Tianjin and Hebei.
In the first half of 2019, AIA China delivered a strong performance with value of new business up by 34 percent year-on-year to $702 million on a constant exchange rate basis.
During the same period, annualized new premiums grew by 31 percent to $753 million on a constant exchange rate basis as the insurer continued to execute its Premier Agency strategy, which is focused on extensive training and quality recruitment to develop a distinctive agency force well equipped to promote savings and protection solutions.
When AIA China became the first foreign organization to be granted an insurance license in the country, Chinese citizens did not yet have basic knowledge of insurance, and the system of relevant laws and regulations was still far from perfect.
Under these circumstances, the company made the introduction of the insurance agency system to China its top priority, recruiting young people who had different educational backgrounds and dared to innovate.
The first batch of 36 agents included former civil servants, teachers and corporate employees, who went through rigorous training offered by the company on how to develop rich professional knowledge and strong marketing skills.
In the early stages of business, the agents were constantly rejected by Shanghai residents who thought they were swindlers, as the residents were unfamiliar with life insurance products and the marketing strategies.
Later, more and more citizens became aware of insurance due to the agents' publicity and marketing.
"The rapid industrialization and urbanization of China, as well as an emerging middle-income group of consumers, have provided insurance companies with unprecedented opportunities for development and a vast market. AIA is lucky to participate in and witness the fast growth of China's insurance industry. It took less than 30 years for China to complete the evolution of the forms of modern insurance, which were established by Western countries over 200-plus years," said Zhang.