Branch Location Choice For Winterthur (Asia) Insurance Company At Hubei, Hunan, Chongqing, Sichuan

The transition period for China joining the World Trade Organization (WTO) was expired in 2004. China further opened his domestic insurance market to the international players. According to the data of March 2010 from China Insurance Regulatory Commission, the number of foreign property insurance companies has grown from 12 in 2004 to 18 in 2010. However, most of the foreign property insurance companies only set up their branches in several cities of East China for business within the coast provinces. Lacking of local outlets, restricted coverage of business in geography, which have been the "Achilles'Heel" of the over sea's insurance companies while they are competing with the domestic insurer. In the meanwhile, such the competition between the foreign insurers within the local region not only decreased the competitor's profits but also restrains the whole foreign insurance industry's development.Currently, accelerating the development of the central and western China have been high lighted as one of the most important strategy task for China Government and the CCP during its modernization construction. Since 2008, owing to the international financial crisis, Chinese export manufacturing industry has continuately sustained significant impact. To further expand the domestic demand, reduce the economic depending onto the exports trading and maintain a stable and rapid economic growth have become the most important goals of the China Government's recent policy. The development of society and economy in central and western China also continuously increased the local insurance demands. Opening new branches in central and western China has already been gradually put on the board's agenda of foreign insurance companies. Due to their relative more developed economy and relative more potential demands on insurance, Hunan, Hubei, Chongqing and Sichuan have drawn more attention from the foreign investor.Firstly, this paper summarized the current situation of China's insurance market. In addition, it further analyzed the property insurance demands of the central and western China, especially for the demands to the foreign property insurer. Eventually combined considering the Winterthur Insurance (Asia) Company's own situation, it processes to choose a capital city to open a new branch from Henan, Hunan, Chongqing and Sichuan provinces based on the analysis on the insurance demands, insurance supply and profitability. The result showed that, at this stage, the most suitable province is Sichuan for Winterthur Insurance (Asia) Company, a typical foreign property insurer to open its new branch.