|
Foreign life insurers operating in Shanghai outperformed their Chinese rivals in premium growth in the first quarter. In Beijing there is a similar situation, with foreign life insurers overtaking their Chinese rivals in terms of total premiums for the first time.
Premiums generated by foreign life insurers in Shanghai stood at 1.11 billion yuan (US$134.2 million), up 18.08 percent year-on-year, accounting for almost a fifth of the entire industry's 5.54 billion yuan (US$669 million) premium value.
That industry total however represents a fall of 8.77 percent year-on-year, indicating that Shanghai's life insurance sector, and particularly locally based insurers, are still in the doldrums.
In Beijing, it is a different story, first quarter life insurance premiums stood at 24.58 billion yuan(US$2.96 billion), a 3.5 fold increase year-on-year. Sun Guodong, bureau chief of Shanghai's China Insurance Regulatory Commission, was keen to play down the fall in his city's premiums.
"The situation is understandable as many Chinese insurers are taking measures to adjust their product lines," he said.
According to Sun, many Chinese life insurers, such as China Life, pressured by stock market investors, have begun consolidating their product range by making profits the top priority, leading to a significant downturn in new premium growth.
In the past, Chinese life insurers paid more attention to premiums than profits, but now some of the leading players, such as China Life and Ping An, are listed on overseas stock exchanges, profits have become the top concern.
"It's a healthy trend," said Sun, adding that another reason for the premium decrease among Chinese life insurers is the withdrawal of banking insurance from many leading insurers.
Bancassurance was once viewed by many Chinese insurance companies as a shortcut to premium increases, but high commission rates have left insurers with narrow profit margins.
When pressured by investors, they are more likely to abandon the product first, according to Ma Xueping, deputy director of China Insurance Regulation Commission Shanghai Bureau.
Away from the stagnant life insurance market, Shanghai remains the top player in the property insurance sector. With a total of 3.02 billion yuan (US$362.3 million), Shanghai's property insurers premiums stand at almost double those of Beijing, which registered 1.75 billion yuan (US$211.3 million) in the first quarter.
In even greater contrast, growth in Shanghai's property insurance sector rose 27.43 percent, while in Beijing, that figure dropped 4.2 percent year-on-year.
Foreign property insurers, barred from operating in the automobile insurance market, only take 7.76 percent of the Shanghai property pie.
But Sun insists their stake will grow: "Foreign players' expansion will be more stable and sustainable as their products are more market-oriented and well-designed," he said.
(China Daily May 12, 2005)
|
