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Liberty Mutual is shifting its operating strategies by bringing in new management teams and recruiting more experienced staff in an effort to turn around performance in the first year of its development in China.
The move marks one of the latest attempts by foreign-funded insurers to improve their operational effectiveness in China, a market in which most are still in their infancy.
"We did not hit our target last year, we had start-up problems with staff in Chongqing, we got 35 percent of our target," said Eric Stephanus, managing director of China Development of Liberty International.
The sixth largest property and casualty insurer in the United States currently has about 20 to 25 sales staff in Chongqing, a major economic powerhouse in Southwest China, but most of them are fresh from universities, with no business contacts or sales experience.
"Our management problem is our first branch manager, who was from outside the region, could not work well with the local staff and the result was low efficiency," said Stephanus.
Management is key for foreign companies operating in China. They need to pay attention to personality matching, the local environment and culture, said Victor Apps, president and chief executive officer of Manulife International Holdings Limited, which has a life insurance joint venture in Shanghai.
With registered capital of 200 million yuan (US$24 million), the company opened its first branch in China in January, making it the first foreign insurer in Chongqing.
Liberty Mutual is not alone in struggling for survival. Nissay-SVA Life Insurance, Skandia-BSAM Insurance and Heng An Standard Life are posting the worst performances among foreign-funded insurers in China, each with less than 1 million yuan (US$120,770) in premiums in January.
Boston-based Liberty plans to turn its operation in China into a wholly-owned subsidiary, a move that could help it accelerate expansion.
"We are making preparations for that, and there will be a result soon,"said Stephanus.
As one of the largest automobile insurance players in its home market, the American company is anxious to enter China's vehicle insurance market, which is currently open only to domestic firms.
(China Daily April 19, 2005)
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