More foreign insurance companies will come to China with the country's accession to the World Trade Organization (WTO), but the liberalization will be carried out gradually to leave more space for the fledgling domestic insurance industry, said a top insurance regulatory official Thursday.
Meanwhile, it is inevitable that both state-owned and shareholding insurance companies in China will conduct reforms in order to step up growth, Ma Yongwei, chairman of the China Insurance Regulatory Commission (CIRC), said Thursday in Beijing at a press conference.
"There have been some disagreements concerning the liberalization of the insurance sector during the multilateral negotiations between China and WTO members on China's WTO accession,'' said Ma.
Many foreign insurance giants are craving a share of the China market in view of its prosperous future.
"But as China's domestic insurance companies are still in a fledgling stage, the door to China's market can not be thrown wide open in the short term,'' he said. "I believe that has been the practice of most countries.''
He said the CIRC, as the industry watchdog, has blueprinted plans to reform both state-owned and shareholding insurers, but they have not been finalized yet and should therefore not be released at the moment.
But he urged that qualified shareholding insurance companies try their best to win listings in order to further optimize their shareholding structure.
"I believe that in the near future some qualified insurance companies will be listed on the stock market,'' he said.
Listing will not only amplify shareholding insurers' capital assets, the lack of which has long hindered their development, but can also help better supervise their operations, Ma said.
So far, for many of China's shareholding insurance companies, most of their shareholders are from state-owned enterprises, which makes it difficult to stimulate, regulate and standardize the insurers, he said.
The CIRC is also working on plans to widen investment channels for insurance funds so as to generate more returns for fund-thirsty insurers, he added.
Ma also mentioned at the conference that the insurance industry had been further developed in the first half of this year, saying it had been making bigger strides during the period due to China's robust economy and a nationwide clean-up campaign.
In the first six months of this year, the total premium revenue of China's insurance industry stood at 102.23 billion yuan (US$12.3 billion), up 27.69 per cent over the same period last year. The growth rate increased by 21.99 percentage points from last year's period.
Among the total premium income, non-life insurance stood at 37.9 billion yuan (US$4.6 billion), up 14.26 percent from last year, while life insurance premiums stood 64.3 billion yuan (US$7.7 billion), up 36.78 percent from the same period last year.
The growth rate in life insurance premiums soared by 33.96 percentage points from the same period last year with 50 percent of the premium coming from new contracts.
In the first half of this year, 186 operating branches, three insurance agencies and four foreign-funded insurers were punished for violating regulations, Ma said.
(China Daily 07/20/2001)
