In a move which will further strengthen its already powerful position in the Chinese market, American International Group (AIG) announced that it has concluded a broad cooperation agreement with the Bank of China, the country’s largest foreign exchange bank.
AIG is preparing for the further opening of the Chinese insurance market, which is now largely limited to the Shanghai and Guangzhou regions. It’s link up with Bank of China will provide a ready made conduit for its insurance and financial products to customers in other regions when they are opened up to foreign competition.
The Chinese government has agreed with European and U.S. trade representatives to open its market to insurance and financial products when it joins the World Trade Organization (WTO), which could happen before the end of the year. Foreign insurers would be allowed a 50 percent stake in life companies, and a 51 percent interest in p/c companies.
The two companies have pledged to cooperate in sharing customer resources and putting together comprehensive financial service plans, and to bolster China’s competitiveness in the wake of its accession to the WTO.
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