Center

Insurance, bankcard ease farmers' financial woes

(China Daily)
Updated: 2006-10-04 08:35

Some agents, by taking advantage of their wide social relationships, help farmers by selling food or giving them a hand during the peak seasons.

For instance, the agents in the Qingshui sales office help 11 farmers sell 70,000 kilograms of food, easing their pressures and also bringing in thousands of premiums to China Life.

The Jiuquan branch is also hiring for its team. "We usually enlist teachers, veterans and villages cadres, all enjoying high prestige in the counties and villages," Zhang said.

Thanks to these efforts, China Life's Jiuquan Branch saw its premiums from rural areas accounting for 65 per cent of its overall business. The premiums from Dunhuang and Jinta, two other counties in Gansu, have been equal to the revenue of the local government.

With more companies entering into China's insurance sector, the competition in the cities has been fierce. So, more insurers are looking at the rural market a huge, untapped resource.

"Strengthening the foothold in cities and gaining the lion's shares in counties and villages" has been the basis of China Life's business strategy for 2006, said Su Hengxuan, the company's assistant president.

Premium from the rural market, which accounts for 48 per cent of its overall premiums, totalled 54 billion yuan (US$6.75 billion) in the first half of this year, an increase of 21.8 per cent compared with the same period in 2005, Su explained.

Ping An, the country's second largest life insurance company, is also paying more attention to the developing rural market. Nationwide there are around 14,000 outlets in rural areas, covering 30 per cent of towns and villages.

However, the exploitation of the rural market should be done with particular care, said experts.

"Given the power that 'word of mouth' has, insurers should pay more attention to misleading sales or unreasonable refusal of claims, both of which will result in mass disbursement demands and thus damage the local insurance market," said Hao Yansu, an insurance professor with the Central University of Finance and Economics.

Also, the China Insurance Regulatory Commission (CIRC), the country's insurance watchdog, will soon release new rules concerning the development of the life insurance industry in rural areas.