China’s insurance market is still at the initial stage. It only accounts for a small proportion of the national economy. Since China’s insurance industry was resumed in 1980, more and more insurance agencies, independent regulatory mechanism and organizations have gradually emerged in the market, and the service scope has also been greatly extended.
By the end of 2005, there are 93 insurance corporations altogether in China, among which six were insurance groups and 82 were insurance companies (including 40 foreign insurance companies and 5 insurance asset management companies). The national premium income had reached RMB 492.734 billion, (RMB 34.1 billion was from foreign insurance companies, accounting for 6.9%), up 13.95% over the year of 2004, and 3.09 times of the amount of 2000, which had a CAGR of 25.29%.
The fast growth of premium income stimulated the insurance asset to a rapid expansion. By the end of 2005, the total insurance asset had amounted to RMB 1522.594 billion, up by 27.03% over the year of 2004, and the total insurance capital had exceeded RMB 100 billion (three times of that in 2002). By the end of 2005, the insurance capital got a capital balance of RMB 1413.584 billion (5.53 times of that in 2000), up by 31.15% over the year of 2004. The insurance companies hold treasury bonds of RMB 358.83 billion, financial bonds of RMB 178.51 billion and corporate bonds of RMB 10.76 billion. Currently, there are 1.815 million staffs engaged in insurance, accounting for over 40% of the total number of staffs in financial enterprises in China. In 2005, 14 new insurance corporations were established in China, among which 13 ones were insurance companies and one was an insurance asset management company.
Along with the rapid growth of economy, China’s insurance industry and the concerned policies are also experiencing a fast development. The market access mechanism has been greatly improved and accordingly, more and more insurance companies have been established. In 2004, for instance, a number of insurance companies got the authorization for establishment, including the first agricultural insurance company, the first construction insurance company and the first pension insurance company.
In 2005, eight Chinese insurance companies and four foreign insurance companies entered Chinese market, heating up the competition in the insurance market. The insurance companies have more rights over capital operation. They have obtained approval to handle corporate bonds, securities investment funds and to invest directly in the stock market. More financing channels are available for the insurance company. For example, they have obtained permissions to invest in stimulant bond or in convertible corporate bond. China Insurance Regulatory Commission is making great efforts to strengthen the management of risk resistance.
However, we should also note that Chinas insurance industry is still at the initial stage. The unbalanced development of economy caused the difference in the development of insurance industry in different areas. For instance, in Guangdong and Shanghai, the insurance market is abundant in both demand and supply, which is far more prosperous than that of Central and Western China. Currently, the major problem is that the development of China’s insurance industry does not accord to the development of the national economy, the society and the demand of Chinese people.
Source:佚名