PICC Life expects 13.3b yuan in claims from victims in Sichuan

PUBLISHED : Friday, 16 May, 2008, 12:00am
UPDATED : Friday, 16 May, 2008, 12:00am

PICC Life Insurance will shoulder at least 13.26 billion yuan (HK$14.79 billion) in claims from devastated areas in Sichuan province, the biggest insurance losses reported so far, according to official media.

About 52,000 individuals bought PICC life policies in Chengdu, Deyang and Mianyang, the regions worst hit by the earthquake, the official Securities Times said yesterday.

The insurer, a unit of PICC Group, had received 102,000 claims as of 8pm on Tuesday, the report said. However, it gave no details on the claims received by the non-life unit, PICC Property and Casualty.

Analysts expect the catastrophe will deal a further blow to PICC Property and Casualty, the country's largest non-life insurer, because there are likely to be large claims over commercial buildings.

A spokesman for PICC P&C said the company was in the process of projecting the insurance losses related to the earthquake.

The China Insurance Regulatory Commission said insurance companies had already paid 1.71 million yuan in claims. At least 3,251 policyholders have died in the earthquake.

As of 3pm yesterday, Ping An Insurance, the country's second-largest life insurer, had received 716 claims from Sichuan province.

Ping An president Louis Cheung Chi-yan delivered the first claim payment worth 100,000 yuan yesterday to the beneficiary of a client who died.

The Shenzhen-based insurer has paid some 213,400 yuan to policyholders. It estimated it would have to pay at least 1.61 million yuan to the earthquake victims.

Its rival, China Life Insurance, which has 110,000 insured clients in Wuchuan, said on Wednesday it had received 150 claims, including 26 death claims and 97 casualty claims, arising from the tragic event.

It estimated combined compensation payments at 134 million yuan, covering several affected localities including Sichuan, Shaanxi, Yunnan, Gansu and Chongqing.

Meanwhile, Fitch Ratings said it believed that the losses arising from the natural disaster, coupled with the poor performance of the A-share market in the first few months of the year, would put pressure on the insurers' earnings for the year.

The rating agency said a large portion of the losses facing the direct insurance market would likely be passed on to domestic and foreign reinsurers. China Reinsurance (Group), is the national reinsurer.