Freeman Corp yesterday took the first solid step to enter the mainland's life insurance market by paying HK$54 million to acquire Cinergy, which is engaged in general and life insurance business and investment linked products.

The chairman of Hong Kong-based Freeman, which has been dealing in securities, financing, property and investment holding businesses, hopes to start the life insurance business next year. Yang Fan-shing said: "We will build our base in Hong Kong but our final goal is to expand our life insurance business into the mainland."

"We will submit our application for a life insurance licence soon and hope to get it in six months to one year."

Yang is a veteran, with over 48 years' experience in the life insurance industry. "Eighty per cent of the company's turnover will come from life insurance business and the rest from other investment-linked products," he said.

Yang is upbeat about the future development of Hong Kong's insurance market. "We are planning to increase the total number of our insurance agents from 100 to 400, keeping our total head count around 1,200, within the next three years."

"Our aim is to become one of Hong Kong's ten largest insurance companies by turnover in five years," he said.

Hong Kong's life insurance market has had a steady growth in recent years with its total new underwriting turnover amounting to HK$45.35 billion in 2005, up 21.7 per cent from the previous year. According to an official report, life insurance underwriting fees in Hong Kong is likely to grow by 10 per cent a year till 2010.

Yang said: "We will train our insurance agents in Hong Kong before sending them to expand the company's business in Southeast Asian economies such as Thailand and the Philippines... But our final goal is to enter the mainland's insurance market."

That 36 insurance companies are fighting for a share of the mainland's life insurance market doesn't perturb Yang. Instead, he describes the mainland as "a huge market".

"Thanks to its huge population, I believe that our life insurance policies will fit into the market... We don't rule out the possibility of setting up a joint venture with a local insurance company," he said, without giving details.

But Freeman's shares fell 3.57 per cent to HK$0.27 yesterday despite its fresh vision of development.