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    China Business
     Feb 23, 2006
Insurance sector doing well after opening up

BEIJING - Nearly five years after China entered the World Trade Organization (WTO), the rapidly growing insurance sector is still the only financial sector in the country that has opened its doors almost completely.

China scrapped geographical restrictions on foreign insurance companies at the end of 2004, enabling them to operate in any province where they have a branch and apply to set up operational entities in any city. The government also slashed the capital



requirement for establishing brokerages in half to 5 million yuan (US$621,118) on January 1, a deregulation that covered both domestic and foreign operators.

Chinese insurers collected a combined 492.7 billion yuan in premiums last year, up 14% from 2004, CIRC figures indicated. That included 122.9 billion yuan from property and casualty insurance, which rose by 12.9% from the previous year, and 324.4 billion yuan from life insurance, an increase of 16.6%.

Besides, Chinese insurers are showing more maturity in managing their assets, which stood at 1.5 trillion yuan at the end of last year, up 27% from a year earlier. Investment returns for China's insurers rose 0.7 of a percentage point to an estimated 3.6% last year, as companies were allowed to invest in corporate debt, domestically listed shares and securities overseas, the regulator said in a document distributed at its annual meeting last month.

On the other hand, foreign insurers are grabbing a larger share of the market. The 40 foreign insurers reaped 34.1 billion yuan in premiums last year, which represented 6.9% of the market. Three more foreign insurers were allowed to enter the market last year, while a total of 25 operational entities were set up by foreign insurers.

(Asia Pulse/XIC)

 

 
 



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