Life insurance premium revenue totaled 99.75 billion yuan, up 14.4 percent from the same period of the previous year and accounting for 62.5 percent of the total. The amount of reserves withdrawn was 280.28 billion yuan. The paid insurance proceeds and indemnity amounted to 22.15 billion yuan. The expense ratio was 6.8 percent -- an increase of 0.2 percent over the same period of the year before. The amount of turned-in sales taxes was 590 million yuan -- an increase of 23.5 percent compared to the same period of the previous year.

Until the end of 2000, insurance companies' total assets in China reached 337.39 billion yuan -- an increase of 64.95 billion yuan from the beginning of 2000. There were four State-owned insurance companies, nine joint-equity insurance companies, 19 joint ventures and exclusively foreign-owned insurance companies, 43 insurance agencies, eight insurance brokerages and three insurance evaluation companies.

2. The development of Chinese insurance companies.

Until the end of 2000, China's invested insurance companies' total assets amounted to 337.39 billion yuan. Property insurance premiums grew 11.9 percent compared to the same period of the previous year -- 1.5 percent higher than the average annual growth rate over the last five years. At the same time the loss ratio decreased 2.7 percent compared to the same period of the previous year.

The structure of life insurance has been optimized step by step and the operating quality has been significantly enhanced. All life insurance companies have ceased their deficit insurance services and opened new services, such as insurance connected with investment or dividends. The insurance premiums of such account for 29.6 percent of the new policy life-insurance premium. In general, profits of most life insurance companies have been greatly increased.

All life insurance companies have taken positive measures to resolve existing loss risks regarding the spread between interest rates. These measures have been proven successful so far. The first measure involves managing the sum budget by strengthening cost accounting and strictly controlling expenses to compensate for losses resulting from the spread of interest rates and economized expenses, as well as relieving pressures from such losses.

The second measure is to lead customers to voluntarily change their high pre-arranged-interest insurance policies to decrease the percentage of high-interest insurance policies.

The third is to increase the return on investments by investing in securities and funds and opening businesses for big-sum deposits with a changeable interest rate. The total amount of money invested in securities and funds amounted to 13.4 billion yuan in 2000, with an increase of 11.38 billion yuan from a year earlier; the average yield rate is 12 percent. The total amount of money used to open businesses for big-sum deposits amounted to 41.67 billion yuan, with an increase of 40.57 billion yuan from a year earlier. The lowest interest rate for the big-sum deposits of the five- to six-year term with a changeable interest rate is 3.7 percent; the highest is 5.5 percent.

The fourth is based on different insurance types to account for profits and losses by applying overall indexes, such as loss and expense ratios to stop the deficit business immediately and to increase profits.

The fifth is to accelerate electronization to perfect the Intranet of enterprises and improve management and working efficiency. Some insurance companies have even opened new channels of sales and services, such as online insurance and tele-direct sales services.

The sixth is the introduction of the ISO international standardization system of quality certification that many companies have adopted to regulate management and service.

The seventh is to set up customer service centers. The opening of a national uniform hotline suggests that the traditional competitive pattern is changing to a new pattern of service competition.

And finally, to establish the National Insurance Association to strengthen self-discipline within the industry.

Some reforms and innovations have been carried out by Chinese insurance companies to help meet market needs and to take part in competition.

The People's Insurance Company of China and China Life Insurance Company, for example, have united their provincial branches and provincial capital branches to simplify administration and strengthen development.

The separation of property and life insurance has been completed at the China Pacific Insurance Company and the Xinjiang Construction Corps Insurance Company.

The pluarlization and internationalization of equity interests at Tai Kang Life Insurance Company and Xi Hua Life Insurance Company by introducing foreign capital.

The reform of the human resource system: 8,000 staff members have been reduced by the People's Insurance Company of China and 383 by China Life Insurance Company, accounting for 10 and 0.8 percent of total staff respectively.

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