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15 December 2014

Corporate Insurance Advent Calendar - Australian Insurers Drive Into China

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Clyde & Co

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Clyde & Co is a leading, sector-focused global law firm with 415 partners, 2200 legal professionals and 3800 staff in over 50 offices and associated offices on six continents. The firm specialises in the sectors that move, build and power our connected world and the insurance that underpins it, namely: transport, infrastructure, energy, trade & commodities and insurance. With a strong focus on developed and emerging markets, the firm is one of the fastest growing law firms in the world with ambitious plans for further growth.
To celebrate the countdown to Christmas, the Corporate Insurance team will be publishing a prediction for 2015 each day.
China Insurance

To celebrate the countdown to Christmas, the Corporate Insurance team will be publishing a prediction for 2015 each day.

The China-Australia Free Trade Agreement (ChAFTA) secures a range of unprecedented financial services commitments from China.

These commitments represent the most substantial market access commitments China has agreed with any FTA partner (other than in its agreements with Hong Kong and Macau) and create new commercial opportunities for Australian insurer, facilitating investment in both directions.

For the first time in an FTA, China has committed to allow Australian insurance providers access to China's lucrative statutory third-party liability motor vehicle insurance market without form of establishment or equity restrictions. China has also undertaken to provide improved treatment on the establishment of internal branches of Australian insurers in China.

This should give a significant competitive edge to Australian insurers as they seek to participate in the sixth largest in the world, with direct written premium of US$253 billion in 2012. Distribution however remains a critical factor for international entrants who need to use improved technology to break the grip of the agency model.

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