China’s investment-oriented insurance premiums fall on crackdown
The insurance premium decline is expected to continue as regulators accelerate efforts to weed out risks in the financial system
Investment-oriented insurance premiums in China tumbled by more than half in the first six months of this year, as Beijing’s crackdown on short-term universal life insurance began to bite.
The trend was expected to continue amid the ongoing regulatory drive to steer the industry back to its primary goal of providing long-term security, market watchers said.
In the first half of this year, investment-related life insurance premiums, including universal life insurance and investment-linked insurance, shrank 58 per cent to 364.8 billion yuan (US$55 billion), according to data from the China Insurance Regulatory Commission.
The insurance regulator has since last year, stepped up scrutiny on insurers to curb their aggressive sales of short-term universal life insurance, or essentially wealth management products, to raise funds. Such aggressive tactics adopted by the likes of Anbang Life Insurance and Foresea Life Insurance alarmed authorities who feared that they would inherently add systemic risks to the financial sector.
In the first half of this year, premiums at Anbang Life Insurance, the third-largest life insurer after China Life Insurance and Ping An Life Insurance, fell 16 per cent to 191.6 billion yuan. In the second quarter alone, the drop was a steeper 98 per cent, based on calculations of the CIRC data.