Eagar to rush out of the gradually saturated market at home, insurance firms in Taiwan are expected to speed up business expansion in Mainland China as the regulators across the Taiwan Strait move to shore up cooperation between insurers in Taiwan and the mainland.

Taiwanese insurance firms are likely to line up for an access to the mainland in the future as insurance market at home is showing signs of saturation, riding on the Memorandum of Understanding (MOU) signed by the regulators earlier this week, predicted a market observer. In 2007, insurance premium revenue took up 15.7% of Taiwan's gross domestic product (GDP), much higher than 2.9% posted by the mainland.

The populous mainland now appears to be a market of great potential for the expansion-hungered insurance firms in Taiwan. Latest statistics show that insurance premium collected in the mainland averages USD 70 per person, in sharp contrast to USD 2,628 per capita in Taiwan.

Like their foreign-invested peers, insurance firms from Taiwan in pursuit of a branch in the mainland are supposed to have not less than USD 5 billion in total assets before handing in an application, a 30-year-plus experience in insurance business, and a two-year-plus representative office in the mainland, according to requirements worked out by the China Insurance Regulatory Commission (CIRC).

Regulators in the mainland will possibly quicken their pace to give permission for Taiwanese insurance firms to set up branches following the signature of the cross-Strait MOU, said the market observer. Under the MOU, the insurance watchdog in the mainland will work together with its counterpart in Taiwan in information exchange, branch establishment, and talent training.

Insurers across the Strait are anticipated to team up with each other in service provision as their first step, pointed out Hao Yansu, a professor at Central University of Finance and Economics, describing the move as a breakthrough for the companies after the cross-Strait direct transportation link kicks off.

Insurance firms in the mainland, however, are not likely to extend their turf to Taiwan in the foreseeable future, nor will they seek an initial public offering (IPO) on the Taiwan stock market, now that competition there is already fierce, according to another market observer. "As far as I know, no insurance firm in mainland has set up a branch in Taiwan yet," said Mr. Hao, echoing the market observer.