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Investment earnings rate jumps to 3.44% for insurers

THE investment earnings rate of China's insurance companies in the first half reached 3.44 percent, up from 2.41 percent in the same period last year as the economy stabilized and the stock market rebounded.

Among the 109.9 billion yuan (US$16.1 billion) realized investment profit, about 51 percent came from fixed-income products such as bonds and deposits while 47.8 percent was obtained through investment in equities including stocks and mutual funds, Yuan Li, spokesman of the China Insurance Regulatory Commission, said today.

"The structure of our investment has become more appropriate. The majority of the capital is placed in the fixed-income products where risks are more controllable. And thanks to the buoyant stock market, the profit from equity investments has been a big lift so far this year," Yuan said.

According to the CIRC, the capital used to buy bond products accounted for 31 percent of the total investment in the first half and bank deposits for 50.2 percent. The investment in stocks and mutual funds accounted for 9.8 percent and 6.8 percent respectively.

China's stock market has staged a strong rebound this year with the benchmark Shanghai Composite Index jumping 62.5 percent in the first six months of this year.

Meanwhile, China's gross domestic product expanded 7,1 percent in the first half, sending signals of a stabilizing growth in the world's third-largest economy.

"China's economic growth lays a foundation for the performance of China's insurance companies, which is better than expected," Yuan said. "But we should continue to pay attention to the uncertainties in the financial environment and take care of the growing complexity in risks."

Insurance premiums on the Chinese mainland gained 6.6 percent to 598.6 billion yuan in the first six months while the net assets of the industry rose 17.5 percent from the beginning of this year to 329.9 billion yuan.

In terms of insurance premiums, China became the world's sixth-largest market last year, up from 10 in 2007.


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