Payouts by Chinese insurance companies in the aftermath of Monday's 7.8-magnitude earthquake would not likely significantly impact the industry, analysts said.

According to Industrial Securities, the life insurance premium for Sichuan province hovered around 21.1 billion yuan last year, so the quake would likely cost life insurers more than 400 million yuan.

Shanghai-based Orient Securities analyst Wang Xiaogang said the quake's impact on insurance companies is "quite limited".

"According to our estimates, payouts for the earthquake would shave less than 1 percent off the valuation of listed insurance companies' shares," Wang said, adding the increased insurance demand in the disaster's aftermath would offset the payouts' long-term impact.

Wan Feng, president of the country's largest life insurance firm China Life, said more than 110,000 people - about half of them students - in Sichuan province have bought policies with the company. But they haven't received any reports from the worst-affected areas.

"The payout for this earthquake will be much more than that of the snowstorms earlier this year, making it a real test for the entire industry," Wan said.

Statistics show that by April 16, China's insurers had paid 4.3 billion yuan to cover the snowstorms.

"But given that China Life had more than 200 billion yuan in premiums for 2007, we can still make the payments," Wan added.

Ping An's database shows 1,374 people bought policies with the company in Beichuan and Wenchuan, the worst-hit regions. Their staff have been actively contacting those policyholders.

To increase payment efficiency, most insurance companies loosened requirements through measures such as simplifying claims procedures and extending claim deadlines.

Minsheng Life even opted to offer payment to those who had lost their policies, while Sunshine Insurance Group established a special 20 million-yuan fund to ensure timely payments. All of the insurance companies launched 24-hour claims' hotlines.

Guotai Junan Securities analyst Wu Yonggang said payouts for property and casualty coverage would not be extraordinary.

"Unlike the snowstorm, the losses from the earthquake are usually not covered by general non-life insurance," Wu said, adding that few enterprises had purchased special earthquake insurance.

(China Daily May 16, 2008)