Insurance sector sees premiums up 32.2%
( 2002-02-05 10:06 ) (1 )

China's insurance industry saw the fastest growth last year thanks to a robust economy and stringent measures to curb market irregularities.

Senior insurance regulatory officials said on Monday that the profitability of insurance companies had improved substantially and structural reforms had made great strides by the end of last year.

Ma Yongwei, chairman of the China Insurance Regulatory Commission (CIRC), said the nation's insurance industry reaped premiums of 210.9 billion yuan (US$25.4 billion) last year -- up 32.2 per cent on the previous year.

This was the biggest stride experienced in recent years, Ma said.

Total assets of the industry amounted to 459.1 billion yuan (US$55.3 billion) last year, up 37.6 per cent from 2000.

And more firms were licensed to do business last year, Ma added.

High profile examples were Tai Ping Life Insurance Co and Tai Ping Non-Life Insurance Co which were allowed to restart business operations in the mainland.

A total of six joint-venture insurance companies and four foreign branch companies have been approved.

Seven brokerage companies, 82 agent companies and 20 loss-adjusting companies were given the green light to launch operations in the past year, Ma said.

A total of 52 insurance companies and 170 insurance intermediary institutions were running operations at the end of last year, he said.

The industry made a total of 5.06 billion yuan (US$609.6 million) in profit, up 34.9 per cent from the previous year.

The rate of returns on investment for the whole industry stood at 4.3 per cent last year, up 0.7 per cent on 2000, while the non-performing asset ratio dropped by 0.6 per cent.

Ma said the structural reform of State-owned and shareholding insurance companies also made great achievements last year.

A general guideline has been worked out for foreign and domestic private shareholders seeking to invest in State insurers, namely China Life Insurance Co, People's Insurance Company of China and China Reinsurance Company.

Ma said the three insurers, which dominate their respective sectors, have been stymied by a chaotic ownership structure, stagnant operational and distribution mechanisms, and inefficient management systems.

The Central Financial Works Conference, which began in Beijing on Monday, will draw up the final plans of the reform of State insurers, he said.

Regulatory work was also strengthened last year with a series of regulations implemented. More than 1,000 institutions that breached the rules were punished, Ma said.

The regulations include the newly issued Foreign-Funded Insurance Company Management Provision and the Insurance Brokerage Company Management Provision.

The market watchdog has launched a solvency-based supervisory mechanism on a trial basis last year.