Foreign insurers are stepping up the pace of expansion in China after the regulators loosened foreign ownership restrictions in the insurance business, which analysts said could intensify their competition with local players.

German insurance group Allianz SE is the latest foreign insurer that has submitted the application to set up a wholly foreign-owned insurance group in China, according to the Shanghai Financial Services Office, the city’s financial authority.

Allianz confirmed the application and said in a written response to China Daily that it is in talks with the Chinese authorities “to advance its growth agenda in the market”.

“As one of the world’s fastest-growing economies, China is a strategically important market for Allianz. We are committed to serving our valued customers across a comprehensive suite of protection, health, property and casualty, as well as investment and asset management solutions,” the German insurer said.

Analysts said Allianz’s plans in China highlighted the regulator’s desire to further open the domestic market to foreign players and it could mean that foreign insurance companies could enter the Chinese market by establishing wholly-owned local units in the future.

British insurance brokerage Willis Insurance Brokers Co Ltd in April became the first foreign insurance broker to apply for the expansion of its business scope in China. French insurer AXA SA also gained regulatory approval to set up a joint-venture asset management company in China through its local life insurance JV with the Industrial and Commercial Bank of China.

FWD Life Insurance Co (Bermuda) Ltd has also submitted an application to set up a life insurance company in China. The company is the life insurance arm of Asia-based investment group, Pacific Century Group, with minority shareholder, Swiss Reinsurance Co Ltd.

The greater presence of overseas players could help bring more competition and foreign insurers tend to be more competitive in areas such as pension-related products, insurance for industrial projects, protection against major disasters, risk management and asset management, said Wang Guojun, an insurance professor at the University of International Business and Economics in Beijing.

“They have been very keen on expanding presence in China given their small market shares in the country,” Wang said.

Foreign insurers have seen slow growth in China with a market share of about 5.6 percent last year in the country in terms of their premium income. Foreign property and casualty insurers had a market share of 1.96 percent while life insurers had a market share of 7.43 percent, according to official data.

Chinese regulators have pledged that they will allow foreign insurers to own a 51 percent stake in their life insurance JVs in China in three years and remove ownership restrictions in five years. The country already scrapped shareholding limits on property and casualty insurance JVs for foreign players.

Wang said that a challenge for foreign insurers is that they will have to boost their capability to compete with Chinese insurers that already have solid market and sales channels in the country.