Insurance Market Overview

Since the economic reform from 1980s, Chinese insurance industry maintains a growth rate at an average of more than 20% a year in terms of premium income. Insurance industry is one of the industries that enjoy the highest growth rates in China.

In 2008, Chinese insurance business grew steadily, which indicated as follows:

• The premium income of the whole industry reached RMB 978.41 billion, which was 39.1 per cent higher than 2007;
• The premium income of property insurance reached RMB 233.67 billion, which was 17.0 per cent higher than 2007;
• The premium income of life insurance reached RMB 744.74 billion, which was 47.8 per cent higher than 2007;
• Total assets of country's insurance companies reached RMB 3.34 trillion, which was 15.2 percent higher than 2007.

By the end of December 31st, 2008, a total of 2,445 professional insurance intermediaries played in Chinese insurance market. Among those intermediaries, 1822 were agencies, 350 were brokerages and 273 were loss-adjusting companies, which took a percentage of 74.52%, 14.31% and 11.17% respectively.

In 2008, premium income of insurance brokerage companies increased 47.02% (from 2007) to RMB 24.53 billion, which took 2.51% of total national premium. The detailed components are as follows:

• The premium income of property insurance is RMB 19.26 billion, which took 78.50% of insurance brokerage companies' total income;
• The premium income of life insurance is RMB 4.24 billion, which took 17.28% of insurance brokerage companies' total income;
• The premium income of reinsurance business is RMB 1.04 billion, which took 4.2% of insurance brokerage companies' total income;

As the coming of the seventh year of China's WTO accession, China's insurance market will fully open to foreign-investment, which means there will be a further fierce competition in the market. With more involvement of foreign insurance companies and the increase insurance awareness of Chinese consumers, more progress will take place in terms of insurance regulations and customer services. The further contribution of insurance brokerage companies will accelerate China's insurance industry's future prosperity.

Regulation

The China Insurance Regulatory Commission (CIRC), established on November 18, 1998, is authorized by the State Council to conduct administration, supervision and regulation of the Chinese insurance market, to ensure that the insurance industry operates stably in compliance with law.

In order to achieve its broad objectives of a large, financial-secure and customer-focused industry, the CIRC is changing its own focus from macro-regulation to consumer protection.

In 2007 China Insurance Regulatory Commission plans to complete Revised Versions of "Administrative Rule of Insurance Agent", "Administrative Regulation of Insurance Brokerage Institutions" and "Administrative Rule Insurance Assessment Firms" and is scheduled to issue officially with effective in late 2 nd half year 2007, future published Revisions of Insurance Intermediary Regulations will define clearly insurance regulatory & supervisory requirements and provide a guide for insurance intermediary operating companies to conduct the business in line with local compliance.

Sources: China Insurance Regulatory Commission www.circ.gov.cn