Life Insurance Quotes

Prudential and Fosun release details of joint venture

09/16/11

Prudential Financial and the Fosun Group, a Chinese company, recently announced the details of their previously reported partnership, according the Wall Street Journal. Stake in the venture will be split evenly between the two companies, and will start with $78 million in registered capital.

Although China's life insurance market is considered one of the largest untapped foreign markets in the world, analysts note that similar joint ventures between foreign companies and Chinese conglomerates have produced somewhat disappointing results.

"There is a re-examination going on because performance has been so disappointing," Brian Metcalfe, an associate professor at Canada's Brock University who conducts an annual survey of foreign insurance companies in China, told the source. "The joint ventures haven't produced the profits that they promised when they were first set up."

Currently, foreign firms with holdings in China's life insurance market account for only 5 percent of the total market collectively, according to the Journal. Yet despite these numbers and the relative failures of previous ventures in the sector, officials at Prudential remain optimistic.

In the United States, individual life insurance policy ownership reached its lowest level in 2010, when just one third of Americans were covered, according to a LIMRA study.

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