According to the China Insurance Regulatory Commission, domestic premium income totaled 1.43 trillion yuan ($230 billion) in 2011, a 1 percent fall year-on-year — the first decline since 2000.

Last year, domestic premium income rebounded to 1.55 trillion yuan, a year-on-year increase of 8 percent.

Yang said slowing economic growth and fiercer competition in the market had contributed to a somewhat sluggish insurance market in China.

As more foreign insurance conglomerates set their sights on the Chinese market, the time has long gone when practically every insurance product sold in China was profitable.

"It is vital for Chinese insurance companies to develop their own competitive edge, such as providing more customer-tailored products," said Yang.

Using the pensions sector as an example, he said as more senior citizens find themselves unable to take care of themselves, insurance companies should provide more value-added services.

President of China Life for six years until 2011, and responsible for taking the group public in 2003, Yang said it is also important for Chinese insurance companies to tap overseas markets.

As early as 1981, the group set up the China Life Insurance Overseas Co Ltd in Hong Kong, the first and largest State-owned life insurance corporation to operate there.

So far, the group has set up branches across Southeast Asia, and its next step is to enter developed nations, a more difficult, painstaking yet necessary stage, said Yang.

"In these developed areas, the insurance market is mature and almost fully occupied by the big brands.

"The key to competing internationally is to join the competition and learn from our foreign counterparts," he said.

He also pointed out that earning more profit from investments is an important transformational step for Chinese insurance companies.

"Foreign insurance conglomerates run non-insurance businesses such as investments, which in most cases, earn them more profit than their insurance business," said Yang.

China Life has made some successful investments in the past, such as in China Guangfa Bank and China Southern Power Grid, and it has invested in areas such as new energy, clean energy, infrastructure construction and the pension industry, said Yang.

"Since China is becoming an aging society, providing special insurance products for senior citizens offers huge potential," said Yang.

huhaiyan@chinadaily.com.cn