China emerges as world's second largest agricultural insurance market

BEIJING: China has emerged as the world's second largest agricultural insurance market after the United States with a compensation payment of $3.4 billion, the country's insurance regulator said today.

China's agricultural insurance covered 1.1 billion mu (73 million hectares) of crops in 2013, accounting for 45 per cent of the total planting acreage, said Xiang Junbo, head of the China Insurance Regulatory Commission.

The agricultural insurance scheme paid 20.9 billion yuan ($3.4 billion) in compensation and benefited 33.67 million rural households last year, Xiang said.

A planter in northeast China's Heilongjiang Province received 3.52 million yuan in compensation from the scheme last year, state-run Xinhua quoted Xiang as saying.

Xiang said China has always supported foreign capital in the country's agricultural insurance programs.

China will continue to extend the coverage of the insurance, and pay high attention to risk control, he said.

He also stressed the importance of establishing a catastrophe insurance system, adding that it would relieve the financial burdens on the government.

Compensation from catastrophe insurance normally covers 30 per cent to 40 per cent of losses internationally. In China, it covers less than 1 per cent.

The Wenchuan earthquake in 2008 caused direct economic losses of 845.1 billion yuan but compensation paid out from insurance was just over 2 billion yuan, accounting for 0.2 per cent of the total losses, he said.

Catastrophe insurance schemes are on trial in Chuxiong Yi Autonomous Prefecture of southwest China's Yunnan Province and Shenzhen City of south China's Guangdong Province, focusing on properties and personal safety respectively, he said.

China will also promote catastrophe insurance legislation to get more government support, he said.