Willis Group Holdings Ltd, the world’s third-largest insurance broker, expects to maintain its annual revenue growth in the China market at at least 20 percent for the next five years and will increase its stake sharply in its local venture, a senior executive said.
Willis plans to increase its stake in Shanghai-based Willis Insurance Brokers Co., in which it already owns 51 percent, to 80-100 percent and the deal could be completed in the next 12-18 months, said Sarah Turvill, chairwoman of Willis International.
Willis also plans to increase its China staff to 250 by the end of this year from about 200 currently and its total China headcount to 500 by 2011, Turvill told Reuters in an interview at Willis Group’s head offices.
“We expect double-digit growth of our revenue in Asia, led by China and India for at least the next five years,” she said.
Willis’s China revenue rose 23 percent in 2006 and 24 percent in 2007. Turvill said she expected that Willis would maintain the same pace of growth in China for the next five years.
Last year, Willis was appointed by the Shanghai city government as the insurance brokerage partner for the World Expo to be held in the city in 2010, which Turvill said would bring the firm a new source of revenue in the next few years.
Willis’s French partner, Gras Savoye, in which Willis is the largest single shareholder with a 37 percent stake, also won a contract for the Beijing Olympics 2008.
More than a dozen global insurance brokers including HSBC Holdings Plc, Jardine Lloyd Thompson and Marsh & McLennan Companies Inc have set up shop in China in the past few years, heating up the competition in China’s infant but fast-expanding insurance brokerage sector.
Willis currently operates 20 offices across China, making it the top foreign insurance broker, with the biggest branch network in the vast country.
Willis also plans to set up a back-up and client-service centre in Shanghai this year to offer documenting, billing and accounting to support its fast-expanding China business, Turvill said.
“Normally, people set up service centres in lower-cost areas just to save money. We are not trying to do that,” she said.
“What we are trying to do is to give ourselves a modern platform for growth going forward.”
The proposed back-up and client-service centre in Shanghai is expected to be launched this year and will initially serve Willis’s staff and clients in mainland China, she said.
Willis may expand and relocate the back-up centre to a second-tier city in northern or western China between 2009 and 2010 to serve its Greater China business, including Hong Kong and Taiwan, she said.
Currently, Willis has its regional service centre in Mumbai, India, where most of its staff are English-speaking employees who do not understand Chinese.
To improve its communications with clients in the Greater China region, Willis had decided to create a new centre in Shanghai. The Mumbai centre would continue to serve the rest of Asia, Turvill said.
In India, Willis has a 26 percent stake in a local venture and expects to increase this to at least 49 percent. The Indian regulator currently only allows foreign investors to own no more than 26 percent of an insurance brokerage joint venture, however, Turvill said.
The Indian partner of Willis has agreed to allow it to increase its stake to 49 percent as soon as the regulator changes current investment restrictions, she added.
(Editing by Quentin Bryar)