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BIZCHINA / Center
AIG offers high-yield products
By Wang Lan (China Daily)
Updated: 2007-09-22 10:36
Global financial insurer AIG will expand its range to cash in on demand
for higher-yielding investment products from China's growing middle class.
An AIG-Huatai booth at a Beijing exhibition. Global financial insurer AIG
will expand its range to cash in on demand for higher-yielding investment
products from China's growing middle class.?[China Daily]
Analysts say creating higher-yield products is now the dominant industry
trend for both local and foreign insurance companies.
Major foreign insurers are trying to diversify into other financial
services in China, according to a PricewaterhouseCoopers survey of 24
foreign insurers. The survey covered all 40 foreign insurance companies
in the country.
Olin L Wethington, chairman of AIG in China, expects the insurance market
to grow at 15 percent over the next few years, driven by the nation's
fast-growing middle class. Many have invested in the booming stock market
and are seeking returns that are considerably higher than bank interest,
he said.
"We consider consumer choices for financial products as the starting
point because there is a fast-growing middle class in China," Wethington
said.
"Their earning power and savings are increasing, which?may make them more
willing to spend part of their income and savings on products that help
to address risks like health and retirement.
AIG is trying to take advantage by developing investment-linked life
insurance products. It launched a mutual fund in May 2006, raising 9
billion yuan in three days.
"The market doesn't always go up - sometimes it becomes volatile and goes
down," said Wethington. "Insurance companies, by definition, are
longer-term players, so we are targeting not the highest returns but
steady and solid returns."
American International Assurance (AIA), a subsidiary of AIG, was approved
to operate life insurance business in Jiangsu and Guangdong provinces in
2006.
AIA also plans to set up service centers and sub offices in the two
provinces in the coming years to expand its reach, said Wethington.
(For more biz stories, please visit Industry Updates)
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