Standard Life stakes China claim

MUTUAL insurer Standard Life has broken into China, the largest foreign insurer to take a foothold in the country. Its joint venture with a local partner will give the company an entry into one of the fastest growing and potentially largest markets for life insurance in the world.

Standard Life and partner, state-owned Teda Investment Holding, will have a joint share in the company, which will be capitalised at 1.3bn yuan (£98.5m). It will begin to sell policies this December in the northern city of Tianjin, next to Beijing.

Tianjin has a population of nearly 10m. As China slowly dismantles its State-run welfare system, Standard said it was strongly positioned to capture a large chunk of the life market.

'It's very important that we give Chinese clients confidence, and we're strong in terms of capital,' said a Standard marketing executive in Tianjin. Local regulatory approval is expected in November.

Total Chinese insurance premiums reached 212.6bn yuan for the first six months of this year, a 32% jump on the year-earlier period.

Foreign insurers, who target the growing numbers of China's new wealthy middle class, must operate through joint ventures with domestic Chinese companies and win licences on a city-by-city basis.

Since joining the World Trade Organisation in 2001 China has pledged gradually to open its insurance market and lift its geographic restrictions.