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China's insurance assets total 1 trillion yuan
(Xinhua)
Updated: 2004-06-27 15:44
The gross assets owned by China's insurance sector reached a record high of
1.0359 trillion yuan ( 126.3 billion US dollars) by the end of May, an official
said Sunday.
The amount of disposal capital of the country's fledging insurance sector
stood at 952.4 billion yuan (116.1 billion US dollars), said Wu Xiaoping,
vice-chairman of the China Insurance Regulatory Commission (CIRC), the national
insurance watchdog.
The figures indicate China's insurance industry has entered a new phase of
development, which is characterized by fast development, rapid expansion of
premium revenue and a lack of choices for the sector to invest its capital for
profits.
Of the total premium revenue, Wu said, 52.5 percent has been put into banks,
with bonds and funds accounting for 31 percent and 6.86 percent respectively.
There were few long- and medium-term investment products available for the
sector as China's young financial market has yet to be developed, he said.
But Wu was optimistic about the prospects of the insurance sector as the
country's economy will maintain rapid and healthy growth for a long period and
the financial market will be improved constantly.
Earlier this year, CIRC Chairman Wu Dingfu warned the industry against blind
pursuit of premium increase when the government was seeking balanced and
sustainable growth.
Noting the irrational pursuit of premium growth has led to such problems as
inadequate reserves in insurance companies and increased business risk, he urged
development of not only premiums but also efficiency and credit in the industry.
"The insurance business neither met the needs of society nor played the role
it should though it grew rapidly in recent years," he said.
Government assistance remains the major method for disaster relief in China,
while in some developed countries insurance companies play the main role, he
noted, adding that the industry still contributed to a small proportion of the
country's economy.
Premiums in China's insurance industry totaled 338.04 billion yuan (40.87
billion US dollars) in 2003, a year-on-year rise of 27. 1 percent, while the
industry's total assets were worth 912.28 billion yuan (110.31 billion US
dollars) by the end of the year.
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