Life insurance perks up premiums
Print Edition
PREMIUMS in China’s insurance industry grew to a seven-year high in 2015 amid an expansion in the life insurance segment, the head of the insurance regulator said yesterday.
But Xiang Junbo, chairman of the China Insurance Regulatory Commission, also said insurers will face some “unprecedented” payment and solvency risks.
The premiums jumped 20 percent to 2.4 trillion yuan (US$365 billion) last year from 2014, the quickest pace in two decades, Xiang said at the regulator’s annual conference.
The life insurance segment lifted the premiums by 25 percent to 1.6 trillion yuan while the premiums of the property and casualty sector rose 11 percent to 799.5 billion yuan.
The life premiums grew strongly as consumers increasingly demanded life insurance policies with a protection element, according to analysts.
Consulting firm McKinsey last week predicted life insurance premiums will continue to grow by an average 15 percent annually over the next five years.
A young and wealthier middle class as well as an aging population will sustain the growth in the premiums.
Xiang said yesterday that the combined profit of life and property insurance companies was expected to grow 38 percent last year, compared with a surge of 106 percent in 2014.
However, he also warned that “unprecedented” risks will confront the insurance industry this year.
Data showed that insurance companies face heavy payments this year as a peak number of insurance policies will mature.
The industry is also facing heavy solvency pressure as businesses expand and new solvency rules come into effect.
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