How to Establish Successfully in the Chinese Insurance Market - A Case Study of the Gerling Insurance Group

Abstract

China is today one of the fast developing economies and most attractive market in the world. Besides its large consumer group, long history and colourful culture, it is presently in a transforming process from a centrally planned economy to a market economy. Since China launched its `open door' policy in 1978, a series of reforms has taken place in both political and economic fields opening up the country gradually to the outside world. Great emphases were placed on encouraging and attracting foreign investment by building up a friendly investment environment. Nowadays, China is offering opportunities for foreign insurers to develop business in the country. Many multinational insurance companies are on their way to entering the Chinese insurance market.

The purpose of this thesis is trying to provide these foreign insurance companies with a general understanding of the business environment in China and recommending how they can establish successfully in the country. In order to be objective and practical, we have chosen Gerling, a multinational insurance company as our case company.

With the purpose of giving Gerling a basics picture of China's business environment, we started our thesis with the analysis of the macro environment by focusing on the political, economic, social and technical environment. Then we continued with the organisational field, which includes government, financial market, labour market, China's social insurance system and commercial insurance industry. Special emphasis has been put on the development and structure as well as the future of China's commercial insurance industry. Based on the above-mentioned analysis, we proposed market penetration strategies for Gerling to establish in the Chinese insurance market.