In what is considered to be a major step forward for China's continued opening up of its financial markets, the country has just approved the operations of Allianz Insurance Holding Co Ltd. The approval effectively makes Allianz China the first fully foreign-owned insurance holdings company to operate in the country.
Allianz confirmed late last week that it had received authorization from China's Insurance Regulatory Commission and China Banking to start operating immediately. According to the German financial services company, the establishment of its Chinese unit should allow it to enhance its financial flexibility in Asia and to capture more business opportunities in the region.
According to Allianz chairman, Sergio Balbinot, the regulatory approval of its holding company is a major landmark for the firm as it places it in a very good position to tap into China's growing economy. The company hopes to make further investments in the country to hopefully drive its long-term market success both in Asia and globally.
The approval granted to Allianz in the latest in a string of new measures implemented by the Chinese government to further open up its financial markets to foreign investments.
The largest move so far this year was an announcement made by the country's Financial Stability and Development Committee that it would be removing foreign ownership caps for futures and securities companies next year. The agency previously announced that it would be removing the caps in 2021 but decided to accelerate its plans an entire year ahead of schedule.
Analysts have stated that China's opening up measures should significantly boost foreign investments into the country, further driving economic growth in the country's financial sector. The opening up measures have also been tailor-made to benefit both foreign investors and existing enterprises within the industry.
The entry of a company such as Allianz will also benefit the country's end-user as they will now have more options to choose from in terms of finding the right financial services provider. By being allowed to operate independently in the country, Allianz should be able to create custom products and services to cater to its Chinese clients.
Allianz's chief executive officer, Solmaz Altin, mentioned in a statement that the company hopes to better serve China's middle class with its range of financial solutions. China has primarily been served by domestic insurance groups and the entry of a fully-owned insurance firm should shake up the competition, hopefully resulting in better quality products for end-users. As of the moment, 70 percent of the country's insurance sector is only being served by 12 domestic insurance firms.
