China's agricultural insurance premium reached 1.1 billion yuan (US$ 145 million) by the end of June 2007, up 124 percent over the same period of last year, according to China Insurance Regulatory Commission (CIRC).
Policy holders in the nation's rural areas received 156 million yuan (US$ 20.5 million) in indemnity, up 240 percent. In the first half of this year, the nation's agricultural insurance organizations provided up to 35.6 billion yuan (US$ 4.7 billion) to relieve the impact of natural disasters on the lives of farmers, said the commission.
In recent years, the Chinese government have intensified financial support for agricultural insurance businesses. Tracing back to 2004, several provinces began allocating local fiscal budget to subsidize agricultural insurance on a trial basis, injecting fresh vitality into the shrinking business.
This year the Ministry of Finance (MOF) allocated one billion yuan to subsidize agricultural insurance on the crop-growing sector in the provinces of Jilin, Jiangsu, Sichuan, Hunan, Inner Mongolia and Xinjiang Uygur Autonomous Region. The six provincial regions registered 503 million yuan in premium by the end of June, accounting for nearly half of the nation's total.
Three insurance companies, including the People's Insurance Co. Group, China United Property Insurance Co. and Anhua Agricultural Insurance Co. Ltd., which run the agricultural insurance business, all reported an increase of more than 100 million yuan in premium for the first half of 2007.
With the dramatic rise in pork price, the Chinese government promised to spend 3.8 billion yuan for a soon-to-be-established insurance scheme that would cover female pigs against illness and natural disasters. Under the scheme, pig breeders would get an annual subsidy of 50 yuan for every female pig insured.
Liu Jingsheng, general manager of China Reinsurance Group, said the agricultural insurance scheme needs improvement on risk transfer. He suggested the nation establish a system comprising agricultural reinsurance organizations, the central and local fiscal departments.
The group has agreed to share with the above three companies the compensation for damage and loss of natural disasters on grain production in the six provincial regions, said Liu.
(Xinhua News Agency July 17 2007)
