Currently im living in Shanghai China, this city has about 20 million people give or take a few million. With as many people as some countries are search engines going to start doing city searches (perhaps it does already), like search only within shanghai (shanghai does have a .sh).

Also i was wondering about the general impact of using locational keywords. Such as Shanghai insurance, compared with global insurance etc.

Perhaps the company does offer insurance globally, however will users be more likely to search via words such as shanghai insurance, or china insurance in comparison with global insurance. Common sense says that the answer to this question changes drastically based on a company's field.