BEIJING, Oct. 27 (Xinhuanet) -- French agricultural
insurance giant Groupama SA unveiled its first Chinese branch in Chengdu,
Southwest China's Sichuan Province yesterday, launching its foray into a vast
new local market, reported China Daily on Wednesday.
Groupama became the first European
insurer a year ago to be allowed to operate a wholly-owned non-life insurance
business in western China. Chinese insurance authorities are pinning high hopes
on the French insurer to help expedite growth of long-dormant agricultural
insurance in the local market.
The Chengdu branch will sell three product packages
in the first stage in the agriculture-heavy province, which cater to rural and
urban residents, as well as small and medium-sized enterprises and private
commercial and industrial businesses, the company said.
"We believe in China's development and the huge
potential of the Chinese insurance market," said Jean Azema, chief executive
officer of Groupama. "The commencement of the Chengdu branch is the first step
of our growth in China."
Azema said his company also plans to apply for a life
insurance licence in China to supplement risk coverage for farmers. Life
insurance and non-life insurance are separately regulated in China.
The insurance coverage for Chinese farmers and
agriculture is highly insufficient to protect farmers from risks as even the
long-dominant providers have largely withdrawn from the risky business in the
absence of government support.
Premiums from agricultural insurance totalled a
meagre 460 million yuan (US$55 million) last year, 0.5 per cent of all property
The authorities recently announced the establishment
of three specialized local agricultural insurance companies in an attempt to
revive the business, but also expressed expectations that the French insurer
could contribute with its 100 years of expertise.
Groupama was established in 1900 and controls
two-thirds of France's rural market. It focused on rural France until its
takeover in 1998 of Gan, the third largest French Insurer. That enabled its
leapfrog into the cities and foreign markets.
The company introduced a variety of new products into
the Chinese market in three packages, including unexpected job loss,
hospitalization subsidies, countryside tourism and entertainment liability
It will sell policies both through agents and banks.
The company plans to set up 10 sales outlets as the first step, including five
in the Chengdu city and five in its suburbs.
The insurer also announced a strategic alliance
yesterday with Agricultural Bank of China (ABC), one of China's four largest
State-owned commercial banks and the nation's largest rural lender. The alliance
will allow Groupama to sell its products through the bank's 2,300 counters and
1,700 agents throughout in Sichuan.
Sichuan is one of China's main agricultural
producers. Some 70 per cent of the 87 million people are engaged in farming, and
agriculture accounted for more than 20 per cent of the province's gross domestic
product last year, according to Yang Zhiwen, vice-governor of Sichuan.
Although the average income of farmers in the
province is still low, the huge potential of rural Sichuan will provide abundant
growth opportunities for agricultural insurance, he said.
Migrant workers from Sichuan, who are originally
farmers, remitted home a combined 31 billion yuan (US$3.7 billion) they earned
in other parts of the country last year, up 26 per cent on a year-on-year basis,