More foreign insurance companies will come to China with the
country's accession to the World Trade Organization (WTO), but the
liberalization will be carried out gradually to leave more space
for the fledgling domestic insurance industry, said a top insurance
regulatory official Thursday.
Meanwhile, it is inevitable that both state-owned and shareholding
insurance companies in China will conduct reforms in order to step
up growth, Ma Yongwei, chairman of the China Insurance Regulatory
Commission (CIRC), said Thursday in Beijing at a press
conference.
"There have been some disagreements concerning the liberalization
of the insurance sector during the multilateral negotiations
between China and WTO members on China's WTO accession,'' said
Ma.
Many foreign insurance giants are craving a share of the China
market in view of its prosperous future.
"But as China's domestic insurance companies are still in a
fledgling stage, the door to China's market can not be thrown wide
open in the short term,'' he said. "I believe that has been the
practice of most countries.''
He
said the CIRC, as the industry watchdog, has blueprinted plans to
reform both state-owned and shareholding insurers, but they have
not been finalized yet and should therefore not be released at the
moment.
But he urged that qualified shareholding insurance companies try
their best to win listings in order to further optimize their
shareholding structure.
"I
believe that in the near future some qualified insurance companies
will be listed on the stock market,'' he said.
Listing will not only amplify shareholding insurers' capital
assets, the lack of which has long hindered their development, but
can also help better supervise their operations, Ma said.
So
far, for many of China's shareholding insurance companies, most of
their shareholders are from state-owned enterprises, which makes it
difficult to stimulate, regulate and standardize the insurers, he
said.
The CIRC is also working on plans to widen investment channels for
insurance funds so as to generate more returns for fund-thirsty
insurers, he added.
Ma
also mentioned at the conference that the insurance industry had
been further developed in the first half of this year, saying it
had been making bigger strides during the period due to China's
robust economy and a nationwide clean-up campaign.
In
the first six months of this year, the total premium revenue of
China's insurance industry stood at 102.23 billion yuan (US$12.3
billion), up 27.69 per cent over the same period last year. The
growth rate increased by 21.99 percentage points from last year's
period.
Among the total premium income, non-life insurance stood at 37.9
billion yuan (US$4.6 billion), up 14.26 percent from last year,
while life insurance premiums stood 64.3 billion yuan (US$7.7
billion), up 36.78 percent from the same period last year.
The growth rate in life insurance premiums soared by 33.96
percentage points from the same period last year with 50 percent of
the premium coming from new contracts.
In
the first half of this year, 186 operating branches, three
insurance agencies and four foreign-funded insurers were punished
for violating regulations, Ma said.
(China Daily 07/20/2001)