Nearly five years after China entered the World Trade Organization (WTO), the rapidly growing insurance sector is still the only financial sector 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$604,200) on January 1, covering both domestic and foreign ones.
Chinese insurers collected a combined 492.7 billion yuan (US$60.8 billion) in premiums last year, up 14 per cent from 2004, CIRC figures indicated.
That included 122.9 billion yuan (US$15.2 billion) from property and casualty insurance, which rose by 12.9 per cent from the previous year, and 324.4 billion yuan (US$40 billion) from life insurance, an increase of 16.6 per cent.
Besides, Chinese insurers are showing more maturity in managing their assets, which stood at 1.5 trillion yuan (US$187 billion) at the end of last year, up 27 per cent from a year earlier.
Investment returns for China's insurers rose 0.7 of a percentage point to an estimated 3.6 per cent 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 (US$4.2 billion) in premiums last year, which represented 6.9 per cent of the market.
Three more foreign insurers were allowed to enter the market last year, while a total of 25 operational entities by foreign insurers were set up.
(China Daily 02/22/2006 page10)
