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Shanghai Leads The Way
By Maggie Zhang |
February 10, 2011, Thursday
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Print Edition
Print Edition
CHINA is trying to encourage the growth of the domestic insurance industry to trim the government's burden in a cradle-to-grave social welfare system especially against an aging population in growing cities. Shanghai is always on the forefront of the reform.
China started to welcome overseas players in 1992 when AIA based its Chinese business in Shanghai as the first foreign insurer to tap the China market since the opening-up policy. Three years later, China introduced its modern insurance law, and the China Insurance Regulatory Commission was set up in 1998 to supervise the growing industry.
AIA itself showcased the industry's growth in Shanghai. AIA's corporate roots began in the city when the group founder Cornelius Vander Starr established American Asiatic Underwriters on the Bund.
The city is already a magnet for overseas insurers. Big-name insurers such as MetLife, Allianz, AXA have based their Chinese joint ventures in Shanghai, and overseas insurers accounted for about one-fifth of the market share in terms of premium.
In total, 115 insurance outlets operate in the city and 302 -insurance intermediary agencies have business here.
Insurance premiums in Shanghai grew 33 percent as more people and companies sought protection from financial risk in 2010.
Total premiums in the city rose to 88.4 billion yuan (US$13.4 billion) last year. Of that, life insurance contributed 68.7 -billion yuan and non-life recorded 19.7 billion yuan, according to the local insurance regulator.
In the past five years, premiums grew at a compound annual rate of 22 percent in Shanghai. Assets of insurance companies increased 73 percent to 239.7 billion yuan.
Insurance penetration has risen to 5.2 percent of the city's population from 3.6 percent in that period. At the same time, average per capita premiums in Shanghai advanced to 4,530 yuan from 2,397 yuan.
The city's insurance regulator has said it supports innovative new products and will crack down on irregularities in the industry, with stiff fines for unethical practitioners.
Community insurance is among the innovative initiatives launched in the city to expand insurance coverage. The publicly financed policy is made to cover risks such as fire.
China started to welcome overseas players in 1992 when AIA based its Chinese business in Shanghai as the first foreign insurer to tap the China market since the opening-up policy. Three years later, China introduced its modern insurance law, and the China Insurance Regulatory Commission was set up in 1998 to supervise the growing industry.
AIA itself showcased the industry's growth in Shanghai. AIA's corporate roots began in the city when the group founder Cornelius Vander Starr established American Asiatic Underwriters on the Bund.
The city is already a magnet for overseas insurers. Big-name insurers such as MetLife, Allianz, AXA have based their Chinese joint ventures in Shanghai, and overseas insurers accounted for about one-fifth of the market share in terms of premium.
In total, 115 insurance outlets operate in the city and 302 -insurance intermediary agencies have business here.
Insurance premiums in Shanghai grew 33 percent as more people and companies sought protection from financial risk in 2010.
Total premiums in the city rose to 88.4 billion yuan (US$13.4 billion) last year. Of that, life insurance contributed 68.7 -billion yuan and non-life recorded 19.7 billion yuan, according to the local insurance regulator.
In the past five years, premiums grew at a compound annual rate of 22 percent in Shanghai. Assets of insurance companies increased 73 percent to 239.7 billion yuan.
Insurance penetration has risen to 5.2 percent of the city's population from 3.6 percent in that period. At the same time, average per capita premiums in Shanghai advanced to 4,530 yuan from 2,397 yuan.
The city's insurance regulator has said it supports innovative new products and will crack down on irregularities in the industry, with stiff fines for unethical practitioners.
Community insurance is among the innovative initiatives launched in the city to expand insurance coverage. The publicly financed policy is made to cover risks such as fire.
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