China's Entry to the WTO: Prospects and Managerial Implications for Foreign Life Insurance Companies

The availability of business opportunities and the improving political environment of the Chinese economy are important factors determining the entry of foreign life insurance companies. The essay further argues that a foreign life insurer with certain attributes, viz. large assets and special links to Hong Kong, is more likely to enter the Chinese market. Although the impact of WTO entry on the Chinese life insurance industry will be mixed, the prospects for foreign life insurers are promising. A foreign life insurer is more likely to be profitable if it is able to make sound managerial decisions, based on the attributes facilitating its entry, in its choice of market niche and Chinese partner, its long-term planning, and its product and personnel management. Investment expertise will become a critical determinant of profitability only when there is full access to capital markets.