Insurance sees big growth
( 2003-07-10 10:07) (China Daily)
China's insurance industry witnessed robust growth in the first half of this year despite the SARS outbreak disrupting normal sales, the chairman of the China Insurance Regulatory Commission said Wednesday.
Chairman Wu Dingfu told the commission's twice-yearly conference yesterday: "The overall development of the insurance industry was healthy, business growth was steady and compensation pay-outs were basically stable.''
Industry-wide premiums rose by 32 per cent on a year-on-year basis in the first six months of this year to 212.6 billion yuan (US$25.6 billion), according to commission statistics.
Property insurance premiums stood at 47.4 billion yuan (US$5.7 billion), up 11.8 per cent from a year earlier.
Life insurers gained 165.3 billion yuan (US$19.8 billion) in premiums, a surge of 39.3 per cent on a year-on-year basis. This was despite difficulties in marketing efforts caused by the SARS outbreak, which had resulted in 4.2 million yuan (US$506,000) being paid in compensation in the first half of this year.
Compensation pay-outs in the industry as a whole rose by 23 per cent year on year in the first six months of the year to 26.7 billion yuan (US$3.2 billion), the commission said.
Wu said the industry's image had been improved by insurance companies' efforts to develop new products that cover SARS and to improve services in the nationwide battle against the virus in the past few months. However, policyholders had also criticized misleading promotions and exaggerated promises of returns by some life-insurance companies.
As premiums continued to grow rapidly, the official said his commission was actively examining ways to further broaden investment channels for insurance companies to get higher returns on their assets to ensure their repayment capacity.
Early last month, the commission introduced a looser regulation for bond investments. Previously, companies could only buy bonds issued by central government-affiliated enterprises but now they can buy bonds issued by all businesses with a credit rating of at least AA.
Insurance companies can now use up to 20 per cent of their total assets to purchase corporate bonds, compared to a previous ceiling of 10 per cent.
The commission is working to raise the ceiling even higher, "hopefully by the end of this year,'' Wu said.
The chairman said joint-stock reform by major State-owned insurance companies have "entered a critical stage.''
Wu stressed that the goal of the reform was to build a modern enterprise system and improve competitiveness. He urged companies seeking overseas public listings to "boldly tap advanced foreign technologies and managerial expertise and give full play to overseas strategic investors' role in improving the company's decision making and internal management.''
The People's Insurance Co of China, the largest State-owned non-life insurer, is one firm undergoing restructuring. It is said to be scheduled to unveil its shareholding company later this month, which may suggest that its flotation is only days away.
|
