Chubb: Patience and Promise in China

In the 20 years that Chubb Insurance has taken global branding seriously, China has presented the most interesting challenge.

For Jan Tomlinson, establishing Chubb in China has been a test of patience and politics but with a lot promise. Tomlinson, as Chubb executive vice president and international field operations manager since 2003, has been a key player in taking the Chubb brand around the world, including China.

(Tomlinson shared Chubb’s foreign experiences in a recent video interview with Insurance Journal’s Andy Simpson: Global Branding, Chubb Take 1: Lessons Lived and Learned and Global Branding, Chubb Take 2: The Insurance Promise of China.)

“Things we’ve learned: It takes a long time. That’s a basic. We’ve also learned you have to work very closely with the government, with the regulator. They are trying to build, in my view, a very Westernized insurance market. There’s a lot for them to learn, because this is not what they have had in the past.”

Chubb went to China in 1993, opening what is called a representative office in Beijing and started to work with the government to get a license. In 1999, Chubb was given a license to get a license.

This initial license allowed Chubb to write foreign-invested enterprises in the city of Shanghai, which back in the mid-1990s was a small number of insureds.

In 2004 the government extended the license of all insurers that had city licenses to provincial licenses and expanded what the license allowed insurers to do/.

This meant Chubb’s license was extended to the province of Shanghai and new markets. “It allowed us to write Chinese invested enterprises and allowed us to write people. So 2004 was actually the turning point, in terms of our ability to start underwriting business.”

Also in 2004, the Chinese government required that every company change its foreign branch into a wholly own subsidiary by June of 2006. Chubb complied and as of April of 2008 Chubb has a wholly owned subsidiary in Shanghai, which now allows it to branch and start looking at other locations to open up operations.

Chubb’s initial assumption about what insurance products would be in demand in China proved to be off, Tomlinson acknowledges.

“We thought what we would probably be looking at would be smaller products, some property business, some small package business, and some accident business,” she says. “In fact, what they really need in the market is an insurer who understands sophisticated products, who understands foreign markets such as the United States, and can underwrite things like directors and officers’ liability, like political risk because those are the things that they can’t get from a local insurance company.”

For more Chubb’s global branding experiences in other countries read Chubb: Lessons in Globalizing an Insurance Brand.