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Sharp decline in premium growth
By Leo Zhang |
May 16, 2009, Saturday
|
Print Edition
Print Edition
INSURERS in China saw a sharp decline in the growth in premiums collected in the first four months of the year as an economic slowdown eroded demand from companies and individuals, the insurance regulator said yesterday.
They collected a combined 414 billion yuan (US$61 billion) in premiums between January and April, a rise of 9 percent year on year, said Wu Dingfu, chairman of the China Insurance Regulatory Commission, in a keynote speech at the Lujiazui Forum.
But the growth rate was a dramatic fall from the year-on-year surge of 49.8 percent in the first four months of last year and a jump of 39 percent for the whole of 2008, according to figures from the CIRC.
"The outbreak of the financial crisis and its spread has brought a lot of difficulties to insurers in China," Wu told the forum. "It also made it harder for insurers to manage their assets."
Wu said that the CIRC is investigating the risk control process at Chinese insurers and conducting stress tests to decide which companies should boost capital to meet redemption requirements.
The CIRC is setting up a system to classify insurers, Wu said, adding that the regulator is boosting cooperation with overseas counterparts to contain cross-border investment risks.
Chinese insurers have identified risk control as a top priority after profit at Ping An Insurance slumped 99 percent last year to 268 million yuan as it made a 22.79 billion yuan impairment loss on its 5 percent stake in Fortis.
Domestic insurers are also allowed to invest in infrastructure projects under a pilot scheme this year.
They collected a combined 414 billion yuan (US$61 billion) in premiums between January and April, a rise of 9 percent year on year, said Wu Dingfu, chairman of the China Insurance Regulatory Commission, in a keynote speech at the Lujiazui Forum.
But the growth rate was a dramatic fall from the year-on-year surge of 49.8 percent in the first four months of last year and a jump of 39 percent for the whole of 2008, according to figures from the CIRC.
"The outbreak of the financial crisis and its spread has brought a lot of difficulties to insurers in China," Wu told the forum. "It also made it harder for insurers to manage their assets."
Wu said that the CIRC is investigating the risk control process at Chinese insurers and conducting stress tests to decide which companies should boost capital to meet redemption requirements.
The CIRC is setting up a system to classify insurers, Wu said, adding that the regulator is boosting cooperation with overseas counterparts to contain cross-border investment risks.
Chinese insurers have identified risk control as a top priority after profit at Ping An Insurance slumped 99 percent last year to 268 million yuan as it made a 22.79 billion yuan impairment loss on its 5 percent stake in Fortis.
Domestic insurers are also allowed to invest in infrastructure projects under a pilot scheme this year.
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