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China's insurance industry continued to grow rapidly last year on the back of strong economic growth, while reform and structural adjustments deepened, the industry regulator said on Friday.
Premiums totalled 431.8 billion yuan (US$52 billion), up 11.3 percent from 2003, the China Insurance Regulatory Commission (CIRC) said, outstripping an estimated economic growth of 9.3 per cent.
Total assets held by insurance companies stood at 1.18 trillion yuan (US$142 billion) at the end of last year, jumping by nearly 30 percent on a year-on-year basis.
Preliminary statistics also indicated a substantial improvement in profitability, according to Wu Dingfu, chairman of the CIRC.
"Last year witnessed the best profitability performance industry-wide," he told the commission's annual conference without giving specific detailed.
Foreign insurers operating in the country witnessed faster growth, with premiums surging by an annualized 45.7 percent to 9.8 billion yuan (US$1.2 billion), or 2.3 percent of total premiums. The 37 foreign insurers grabbed a 15.3 percent market share in Shanghai and 8.2 percent in Guangzhou, South China's Guangdong Province.
The commission said life insurance premiums rose 7.2 percent year-on-year to 322.8 billion yuan (US$38.9 billion), slowing down from higher growth rates in recent years due to factors such as business readjustments by insurers and an interest rate increase last October.
Many Chinese life insurers trimmed unprofitable business, mostly single-premium type products, in a bid to improve profitability, and put more efforts into selling protection-oriented traditional products, which the CIRC said had proven successful.
"Although the pace (of premium growth) came down, 2004 was the most profitable year in recent years," Chen Wenhui, director of the CIRC's Life Insurance Regulatory Department, told reporters on the sidelines of the conference.
The investment structure saw some improvement, the commission said, with bank deposits, the safest but the lowest yielding category, accounting for 33 percent of all investments, down by 5.1 percentage points from 2003.
The proportions of Treasury bonds and financial bonds, mainly those issued by policy-oriented banks, increased by 6.8 and 0.4 percentage points respectively, it said.
Hailing last year's achievements, Wu said much remains to be done this year. The CIRC will push insurance companies harder in improving corporate governance as a way to deepen insurance reform, the official said, pledging to support insurers in ushering in strategic investors from home and abroad and enhance the role of board of directors.
(China Daily January 8, 2005)
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