China Taiping pays price for BP disaster and earthquake
Two international catastrophes, an earthquake in Chile and the explosion on board BP's Deepwater Horizon oil rig in the Gulf of Mexico, resulted in China Taiping Insurance Holdings paying out a combined HK$126.27 million in compensation in the first half.
The mainland insurer, which conducts reinsurance business for international insurance companies, paid HK$102.11 million to victims of the Chile earthquake in February, which left 700 people dead and caused damage estimated at US$30 billion. It paid HK$24.16 million for the oil rig explosion in April, which killed 11 crewmen and resulted in a disastrous oil spill.
The two major claims saw China Taiping's reinsurance arm report a 36 per cent drop in interim net profit to HK$173.58 million. This was offset by strong growth of its general and life insurance businesses. It sells life and general policies on the mainland and general policies in Hong Kong.
China Taiping chief executive Kenneth Ng Yu-lam said the insurer did not expect to have to meet any more compensation claims from the two catastrophes in the second half.
'The Chile earthquake was six months ago so there should be no more new insurance claims,' he said.
'As for the BP incident, we only provided reinsurance for the explosion, not for any liability for the pollution or any other liability claims.'
Overall, the group reported a 9.7 per cent increase in earnings to HK$603 million for the six months to the end of June, up from HK$549.63 million a year earlier.
The life insurance business saw a 5.6 per cent growth in earnings to HK$356.68 million, thanks to strong sales of new policies. The general insurance business rose 894 per cent to HK$191.86 million as a result of a significant turnaround of operations in the mainland property and casualty insurance business and the contribution from Ming An Holdings Company, which it acquired last year.
Total premium income increased 89.6 per cent to HK$27.27 billion during the period.
Looking ahead, Ng said the mainland's strong GDP growth would drive sales of insurance products. 'But the investment markets worldwide are still full of uncertainties. As such, we will continue to adopt a cautious and prudent investment strategy for the second half.'
Policies pay off
Disaster payouts were offset by strong growth in China Taiping's insurance businesses
The amount the company earned from its life insurance business, in HK$: $357m
