First mutual insurance companies established in Qianhai

Source :Tan Yifan, Liao Zhenni

June 22 marked the country’s first step to introduce an insurance organization structure from abroad, as Zhonghui Caichan Mutual Insurance Company was granted the first mutual insurance license from China Insurance Regulatory Commission. The mutual insurance company is among many innovative finance headquarters in Qianhai.

As a major form of insurance organizations in the world, mutual insurance is characterized by allowing policyholders to own the companies. Such shared ownership encourages policyholders to be fully engaged in developing products, managing companies as well as supervising the members to improve their business and service. The mutual interests of all the policyholders are expected to be a top priority.

According to International Cooperative and Mutual Insurance Federation (ICMIF), mutual insurance companies’ income reached US$1.3 trillion in 2014, accounting for 27.1% of the global share in the insurance market.

For small- and medium-sized businesses (SMBs), however, a majority of insurance companies are limited to offering basic coverages, failing to meet the high demand for credit management and risk prevention. Since financing is a common problem faced by SMBs, there have been calls for innovation in insurance system and risk-management approaches.

As a pioneer in developing mutual insurance business in China, Qianhai Financial Holdings Co. expands to insurance industry. “The introduction of mutual insurance is to keep China in line with global insurance market and to diversify domestic organization structures,” said Li Qiang, the company’s chairman.

Besides the Zhonghui Caichan Mutual Insurance Company, two more companies obtained the licenses.

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2016-06-24 11:05:00

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