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Higher awareness fuels insurance premium rise

INSURANCE premiums on the Chinese mainland last year rose by the fastest since 2002 as people become more aware of the need for financial protection, the top industry regulator said yesterday.

A total of 978.4 billion yuan (US$143 billion) in premiums were collected last year, a jump of 39.1 percent from a year ago, the China Insurance Regulatory Commission said yesterday on its Website.

Life insurance led the growth as premiums totaled 665.84 billion yuan last year, a rise of 49.2 percent over a year ago. Non-life insurance premiums added 17 percent to 233.67 billion yuan in the period.

Some insurance firms have tailored products to cater to corporations and individuals as they became more aware for the need to be adequately protected financially. Natural disasters also highlighted the need for corporations and individuals to buy insurance as a protection. Insurers paid out 297 billion yuan last year, a 31.2-percent rise from a year earlier because of a snowstorm in early last year and a massive earthquake that killed more than 80,000 people in May.

Meanwhile, insurers also cut risky investments last year due to the tumble in the stock market. At the end of last year, insurers placed 84.4 percent of their investments in bank deposits and bonds, up 16 percentage points from the start of the year while investment in stocks and funds dropped by 13.8 percentage points to 13.3 percent last year.

Investment in stocks and funds had been popular in 2007 due to a booming stock market as the benchmark Shanghai Composite Index hit a record high of 6,124 in October 2007. The index ended at 1,985 yesterday.

The industry's total assets topped at 3.3 trillion yuan as of the end of last year, up 15.2 percent from last year's beginning, the regulator said. Ten new insurance firms started operations last year, bringing the total number to 130.

China Life, the country's biggest life insurer, told the Shanghai Stock Exchange in a statement yesterday that its unaudited net profit last year fell more than 50 percent from a year earlier, based on Chinese accounting standards.


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