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Global crisis hits insurance industry

GROWTH in premiums collected by insurers in China dropped sharply in the first four months of this year as the economic slowdown dented demand from companies and individuals, the nation's top insurance regulator said today.

Insurers in China collected a total of 414 billion yuan (US$61 billion) in premiums during the January-April period, up 9 percent year on year, said Wu Dingfu, chairman of the China Insurance Regulatory Commission, at the Lujiazui Forum 2009.

The growth rate compared with a year-on-year rise of 49.8 percent in the first four months of last year and an increase of 39 percent for all of 2008, according to figures from the CIRC.

"The outbreak of the financial crisis and its spread have brought a lot of difficulties to insurers in China," Wu said in a keynote speech to the forum. "It also made it harder for insurers to manage their assets."

Wu said that the insurance regulator is making thorough investigations into Chinese insurers' risk control arrangements and conducting stress tests to decide which companies should boost capital to meet redemption requirements.

The CIRC is setting up a system to classify insurers and will adopt different measures to supervise them, Wu said. The insurance regulator is also boosting cooperation with overseas counterparts to contain cross-border investment risks, according to Wu.


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