BOCOM LOOKING TO ENTER CHINESE INSURANCE MARKET

China’s State Council has agreed to allow locally based Bank Of Communications (BoCom) to operate as a pilot universal bank, reports China Daily . Under local regulations, this will allow the company to branch out into the insurance sector. BoCom president Zhang Jianguo said last week that the company, which currently operates in the loans sector, would “commit to setting up the first insurance company initiated by a bank [in mainland China]”. BoCom already has an insurance subsidiary — Hong Kong-based China Communications Insurance Co (CCIC). This was launched in 2000 as a p/c insurer, capitalised at HK$100m. Possible partners for BoCom’s mainland operation, thought likely to be a life operation, were said to include Air China, China State Construction and China Shipping. China Insurance Regulatory Commission (CIRC) spokesman Yuan Li said that the regulator had yet to receive a formal application from any bank to start its own insurer, but agreed that the move made sense. “Banks can take advantage of their marketing network and customer base once they start their own insurance business”, he said.