When it comes to tapping into the insurance sector of the rocketing Chinese economy, Bermuda's two biggest players ACE and XL Capital have shown a pioneering spirit that is winning them goodwill and promoting their corporate identity in a country where they have previously been unknown.

The two Island heavyweights have, in their own ways, moved into the Chinese market and placed an emphasis on adding value to the link-up with the China corporations and the vast country as a whole.

While nearly 500 foreign companies, many household names globally, have been approaching the China market, the XL and ACE have managed to jump to the front of the queue in the eyes of Chinese authorities and senior industry figures because of their tailored and thoughtful approach, said Bermuda author and international business lawyer John Milligan-Whyte.

With a population of 1.3 billion and a domestic insurance industry recently compared to being at the same stage of development as England's in 1856, the potential for doing business in China is huge. The country's economy is growing at a sustained rate that has never been seen in history and is on course to overtake the US economy as the biggest on the globe.

The example set by Bermuda's XL and ACE in getting the correct balance of mutual co-operation and shared benefits with the Chinese is highlighted in a new publication co-authored by Bermuda's Mr. Milligan-Whyte and Dai Min.

In February 2004 the two authors, who co-chair the China Bermuda Society, recognised the desire for foreign insurance and reinsurance companies to enter the growing China market and also the desire for the Chinese government to develop its domestic market, which was facing management challenges and antiquated practices.

In the newly published 'New China Business Strategies: Chinese and American Companies as Global Partners' the pair explain how they "developed a plan for a very sophisticated insurance executive education program to teach Western insurance management techniques needed to achieve the development goals of China's insurance and reinsurance companies."

XL Capital was convinced of the benefits in sponsoring an executive education program "designed to meet the needs of chairmen, CEOs and CFOs of China's property and casualty companies." This was an example of what Mr. Milligan-Wyte and Ms. Min had envisaged as a step towards a 'win-win' genuine global partnership that would work in China.

Professor Mannie Manhong Liu of Remin University and Prof. Zhang, chairman of the insurance department at the same university were recruited, while Jerry de St Paer, then CFO of XL, got Jerry Rosenbloom and Neil Doherty of America's most respected senior executive education insurance department at Wharton's School of Insurance and Risk Management, along with a number of XL senior executives to teach on the new China education programme.

The China Insurance Industry Executive Leadership Program was announced by XL in early 2006 and was the first SIno-Foreign insurance leadership course endorsed by the China Insurance and Reinsurance Council.

"Sponsoring the program 'with the right spirit' provides a strategic opportunity for a reinsurance company that is not well known in China. The foreign reinsurance company was able to immediately acquire strategically valuable recognition, respect and gratitude from China's insurance regulators and through such an executive education programme, from the top executives of the major Chinese insurance companies," write Mr. Milligan-Whyte and Dai Min in their book, which is proving popular with Chinese business leaders since it was translated into Mandarin.

"From the perspective of a foreign company, how else could it quickly and effectively distinquish itself from other foreign competitors seeking footholds in China other than by earning respect and gratitude in China by exhibiting the 'right spirit' and aligning the foreign company's enlightened 'China strategy' with 'China's strategy' of developing its insurance and reinsurance industries?"

Using its own initiative ACE set up an education programme for Chinese insurance regulators in 2004, thereby "adding value" to its strategy for entering the China market by helping the country's regulators in their efforts to build advanced systems for the insurance and reinsurance sectors.

The ACE initiative followed on from a link-up with the Huatai Insurance Company two years earlier. That partnership allowed both companies "to leverage ACE's extensive product range, access to global investment capability, and sophisticated underwriting and Huatai's extensive, high quality customer base and seasoned local management expertise," according to Mr. Milligan-Whyte and Dai. Min.

"This alignment of ACE's China strategy and Huatai's China strategy and need for foreign management and investment expertise fell short of a Genuine Global Joint Venture, but was an advanced and intelligent structure which enables ACE nationwide access to China and to provide its products to the fastest growing and largest market in the world."

Mr. Milligan-Whyte, of Bermuda-based international business law firm Milligan-Whyte & Smithm which has a significant China presence, said he and his partners are prepared to assist other US and Bermuda companies interested in appriaching the China market in the right way.

Of the XL and ACE inititaives, Mr. Milligan-Whyte told the Royal Gazette they had "touched the heart of the Chinese" and been very effective. Indeed, XL were honoured with a dinner reception at the Great Hall of China - the equivalent of the US White House, as a mark of respect for its training initiative.

• Last week a delegation of senior figures from China's insurance sector attended the International Reinsurance Congress at the Fairmont Hamilton Princess and met with Bermuda insurance executives as well as paying a visit to ACE and meeting with Premier Ewart Brown.