Insurance sector 'must transform to compete globally'

China Life former chief says industry has huge potential for development

The insurance industry in China is at a critical point of transformation, and Yang Chao knows it only too well.

The former president of China Life Insurance Group, the largest commercial insurance group in the country, said it is of great importance that Chinese insurance companies stand out, amid fierce global competition in the sector.

"Nowadays the competition in this industry has become global, without national boundaries," he said.

He added that the Chinese insurance industry is still at the initial stage of development, but it has huge potential.

However, amid fierce global competition in the sector, it is vital for the Chinese insurance industry to transform itself, and quickly, if it hopes to establish itself.

"To survive and prosper against this fierce global competition, it is crucial for Chinese insurance companies to raise their profile, to transform themselves," he said, highlighting three areas: providing more value-added services, tapping the overseas market, and developing its investment business.

Yang was chairman of China Insurance Holdings in Hong Kong between 1996 and 2005, and has been engaged in the financial industry for more than 36 years.

Speaking in his office at the China Life Insurance headquarters — a glass-clad skyscraper on Beijing's Financial Street, which accommodates more than 150 multinational companies and financial institutes, Yang said that since the country's opening up was launched in 1978, the Chinese insurance industry "has experienced fast development".

"Yet it is still relatively backward compared with western counterparts," he added.

He pointed out that insurance premium income had seen double-digit growth for most of the past 30 years, but since 2011 growth in the domestic insurance market has been slowing.