(Yicai Global) Nov. 26 -- Allianz Group is set to become the first foreign-funded insurer in China, helping the German financial services company expand in the world's second-biggest economy. 

The China Banking and Insurance Regulatory has approved the set up of Allianz China Insurance Holding, Munich-based Allianz said on its website yesterday. Based in Shanghai, the new unit is expected to open in one year. The wholly owned holding company will enhance Allianz's strategic flexibility to boost investment and growth in the country, it added. 

"China is central to our growth strategy for Asia," George Sartorel, the regional chief executive for Asia Pacific, said in the statement. "This development positions Allianz strongly to combine our global knowledge with deep insights into local consumer and industry needs."

At the end of last year, foreign insurers made up less than 6 percent of the Chinese market. But big prizes may await those who come in early as Allianz expects premiums to rise 14 percent over the next decade, according to its research.

China liberated the property insurance sector from foreign ownership restrictions in August. Overseas firms may also acquire a maximum 51 percent stake in joint ventures with local life insurance companies. This shareholding restriction will be scrapped in three years. 

Earlier this month, American Express' Chinese JV got the green light to set up the first foreign clearing institution in China, which allows the credit card provider to settle transactions in Chinese yuan.

Editor: Emmi Laine