Cinda Property, Casualty Insurance and Happy Life Insurance have signed an agreement to cross sell each other’s products, in what is the first such formal model of cooperation between a non-life company and a life insurer in China.

The agreement between Cinda Property and Happy Life, both of which are subsidiaries of China Cinda Asset Management Co (Cinda AMC), has the approval of the China Insurance Regulatory Commission. Cinda AMC is a financial holding company with interests in insurance, banking, securities, trust operations and fund management.

Under the mutual cross selling pact signed last month, the two insurers will distribute each other's products in Beijing, Chongqing, Shanghai, Guangdong, Jiangsu and Zhejiang. Happy Life operates in 20 provinces while Cinda Property has 10 branches across the country.

Under China's insurance laws, an insurer is classified either as a life insurance or a non-life company. To operate in both markets, an insurance group would establish life and non-life insurance units. All the largest insurance groups in the country - China Life, Ping An, PICC - run both businesses. It is understood that these groups have experimented with the cross selling of life and nonlife products.

For example, China Life Insurance and China Life P&C Insurance would sell the products of the other unit in areas where the latter does not already have an outlet. 

A number of questions remain to be resolved in mutual cross selling arrangements. For instance, the rules are unclear as to whether the customer database of the life unit is accessible to the non-life partner, and vice versa. Another issue is the training of sales agents to ensure that they are knowledgeable about the life and non-life products they market.