Tower's ambitions turn to China

By RICHARD BRADDELL

WELLINGTON - Recently demutualised Tower Ltd hopes to spread its wings beyond Australian and New Zealand shores by getting a life insurance licence for China.

Tower has made no secret of its Asian ambitions, and its managing director, James Boonzaier, said a study of a number of markets showed China had the greatest potential.

China's insurance market has been growing at 50 per cent a year and a strong savings ethic has produced personal savings estimated at 16 per cent of income.

Mr Boonzaier said the process of gaining a licence could take up to two years, and during this time Tower would seek a suitable joint-venture partner as required by Chinese law.

The fact that Tower will be the only New Zealand-based life office seeking a Chinese licence could be an advantage as the Chinese Government has so far issued only one licence to each foreign country seeking to enter its market.

Tower also believes its Government roots, which ended only 10 years ago when it became a mutual, will prove attractive to Chinese insurance companies and other state-owned enterprises that might follow a similar evolution.

Mr Boonzaier said Tower was willing to share the experience it gained in this process.

In China last week, he met the vice-chairman of the China Insurance Regulatory Commission and key local officials and business people.

A representative office already established in Beijing will be run by James Wong, a New Zealander educated at Nanjing, Tokyo and Harvard Universities.

The office and activities leading up to gaining the licence are likely to cost Tower around $1 million a year.

It has been suggested that Tower's head office might one day follow its centre of gravity to Australia, but Mr Boonzaier said such a move was not planned, and so there was no conflict with China's policy of one licence per country.

In any event, the head office in Wellington was small, and it was not that important where it was located, he said.

Tower's decentralised style of operation was well suited to China.