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July 17, 2009

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Insurers net hefty premiums

CHINA'S insurance sector notched up 597.55 billion yuan (US$87.88 billion) in premium revenue in the first half this year, said an official of the China Insurance Regulatory Commission.

The earnings showed an increase of 6.4 percent year on year, Chen Wenhui, the commission chairman's assistant, has said.

Property insurance premiums rose 15.84 percent to 157.6 billion yuan, while life insurance premiums hit 439.95 billion yuan, up 3.34 percent year on year.

Life insurance companies chalked up 11.58 billion yuan in net profit.

Low-income groups, including farmers, were becoming aware of the benefits of insurance and were active in taking out policies, Chen said.

Micro-insurance products are tailored for low-income people, as they require a relatively lower annual premium.

Micro or small-amount life insurance in rural areas first took off in August 2008 when China Life, a leading Chinese life insurer, piloted 12 micro insurance policy types against risks such as disease, death and disability to low-income farmers in nine provinces.

Another nine provinces were added to China Life's experimental program in May, said Wan Feng, China Life president.

Farmers could buy life insurance policies priced at 17 yuan to 26 yuan annually for coverage of about 20,000 yuan per policy.

Wan said China Life had insured 6.03 million farmers in the 18 provinces, taking in 138 million yuan in premiums.

There were also other micro-insurance products specifically targeting different sectors, such as planting, livestock breeding, farm machinery and farmers' household property, as well as micro-medical insurance and insurance against micro-loan, a practice adopted in rural areas to provide financial products there.

Dong Bo, deputy chief of the commission's property insurance supervisory department, said insurers in China offer more than 160 kinds of agricultural insurance.


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