Growth of China's insurance premiums slows sharply

SHANGHAI: Chinese and China-based foreign insurers collected combined insurance premiums of 855.45 billion yuan ($125 billion) in the first 10 month of this year, up 47 per cent from a year earlier, but the growth slowed from 49 per cent in the first nine months, regulatory figures showed.

In October alone, the insurers recorded total premium income of 61.49 billion yuan, up 21 per cent from a year earlier, according to Reuters' calculations based on figures published by the China Insurance Regulatory Commission (CIRC) late on Monday. The regulator did not give details of the figures.

The official China Securities Journal said on Tuesday that the insurers' adjustments of their policies, partly propelled by China's falling asset prices, had slowed the growth of the country's insurance industry.

"It is forecast that the growth of insurance premiums would fall further and sharply in future," the newspaper said without elaborating.

In addition, Chinese officials have warned of the impact of the global financial crisis on China's insurance sector, as many foreign insurers are operating in China and Chinese companies are also expanding abroad.

The total assets of insurers in China reached 3.19 trillion yuan by the end of October, up slightly from the end of September and compared with 2.89 trillion yuan a year earlier, according to CIRC figures.

The combined value of their investments dropped by 9.12 billion yuan to 2.16 trillion yuan by the end of October from the end of September, while their total bank deposits rose by 18.74 billion yuan to 722.71 billion yuan, CIRC figures showed.

China's benchmark stock index plunged 24.6 per cent in October, its worst monthly fall since 1994, among other signs that the country's asset prices are falling.