ING Capital Life Insurance Company has announced a major business undertaking in the highly lucrative mainland insurance market. The joint venture between ING Groep and Beijing Capital Group will find itself tapping into new markets after receiving permission from the China Insurance Regulatory Commission (CIRC) to underwrite group life insurance policies and expand its base from Dalian and Beijing to include Liaoning province.

With immediate effect, ING Capital Life will augment its Dalian palette to include group life, group short-term and group accident products, targeting corporations and complementing its existing individual life business offered from its headquarters in the northern China city. According to the joint venture, the expansion of services will eventually include Beijing, which formally began operations in January 2005.

In an added boon for the successful venture, the regulators have also granted ING Capital Life to expand its scope to the surrounding province of Liaoning, which is presently home to over 42 million people and roughly 10% of China's large and mid-sized state-owned enterprises. Under this approval, ING Capital Life will now use its agency force to score premiums in the cities of Shenyang, Anshan and Fushun, all of which have populations that easily one million people.

Commencing in Dalian in December 2002, the venture has proved a resounding success for both ING and Beijing Capital Group, with over 30,000 customers under the banner and total premium income of RMB180 million (close to $22 million). In its base market, the life insurer is also capturing the number one position in terms of new premium income.

In terms of the market as a whole, the China life insurance business is continuing to live up to expectations of premium growth and increasingly open to more foreigner firms under its WTO obligations.

By the end of 2004, the insurance business in China had around RMB1.13 trillion ($137 billion) in total assets, while total premium growth in the life business expanded by 11.3% after roughly 10 years of 30% annual growth. For foreign life insurers, the year also marked the emergence of a joint venture between Generali and China National Petroleum Corp, which in the first quarter of 2005 captured 18% of the nation's total life premiums, including $2.4 billion of group life policies since its launch.

"Although we face increasing competition, we look forward to building ING Capital Life into a major insurer in Northern China leveraging ING's international expertise and distribution via Capital Group's businesses which include financial institutions, real estate and bonds," says Barry Tsai, general manager of ING Capital Life.

The approval follows the December 2004 announcement by ING's other insurance joint venture, Pacific Antai Life Insurance, which received one of the first approvals by a foreigner player to sell group insurance products.