The ERGO Insurance Group, which is part of the Munich Re Group, has launched a joint venture (JV) ERGO China Life to offer life insurance to private customers in the Chinese province of Shangdong.

Shandong is said to be the third largest domestic insurance market in China.

In January 2011, ERGO signed an agreement with Shandong State-owned Assets Investment Holding Company (SSAIH) to establish the JV in which each firm holds 50% stake.

ERGO China Life is located in the provincial capital of Jinan and currently employs about 100 people.

The company will offer endowment insurance policies, including death benefits, for various durations which are specially developed for the Chinese market and focused primarily on the growing middle class.

ERGO board of management member Dr Jochen Messemer said that the market for life insurance in China alone is expected to grow at an annual rate of 15% in the coming years.

"We are working on the assumption that in 2020, China will be the third largest primary insurance market in the world as measured by premium income," Messemer added.

ERGO is currently working on a joint venture in India, which is expected to start offering life insurance in 2014. The company has been operating in non-life insurance in the country since 2008 through the joint venture HDFC ERGO.

SSAIH currently holds investments of €4.1bn and employs 12,000 people.