The country's largest non-life insurer yesterday went on a publicity offensive to stem the decline in its share price triggered by a last-minute delay in announcing its annual results and later fuelled by disappointing earnings. PICC Property and Casualty tabled measures to help cut the loss ratio of motor vehicle insurance and trim its investment portfolio. The moves were announced as shares of the insurer, which claimed 58 per cent of the mainland non-life market last year, tumbled a further 7.8 per cent to $2.05. Its shares have shed 14.5 per cent since April 13, the day before it announced a one-week delay in publishing its results. PICC saw an 85.7 per cent plunge in net profit to 208 million yuan last year from 2003 and blamed it on the sharp rise in the loss ratio of motor vehicle insurance and 948 million yuan of net losses on trading and non-trading securities as the domestic stock markets continued to slide. The company's motor insurance loss ratio shot up 5.5 percentage points from the previous year to 85.8 per cent in the 12 months to December, as new road traffic laws raised the frequency of claims and claims payment standards for personal injuries. The business segment also fell victim to higher accident rates resulting from the increased number of private vehicles and rising number of small claims, pushing up claims settlement expenses. Motor insurance accounted for 70.7 per cent of PICC's net premiums earned last year. A combined ratio of 94.4 per cent suggests the profit margin of PICC's motor insurance line fell to 5.6 per cent last year, down from 10.9 per cent a year earlier. This, along with other factors such as increasing early termination of homeowners' insurance after a mortgage rate rise, dragged down PICC's overall underwriting profit margin from 3.7 per cent to 1 per cent last year. 'This year, we should see a substantial improvement in underwriting profit and rising investment returns,' PICC chief executive Wang Yi said yesterday. 'We will try to increase motor insurance profitability [this year].' PICC last year raised premium rates for loss and damage motor insurance products by just over 20 per cent and third-party liability policies by 23 per cent. 'Our [motor insurance] premium rates are now at the high end of industry level ... and do not have large upside potential,' Mr Wang said. 'But there is room to compress the loss ratio further.' PICC aims to reduce the motor insurance loss ratio by 7.8 percentage points this year, with two to three percentage points coming from improved claims settlement alone. It will begin to review medical records relating to personal injury claims, visit accident sites more often and work more closely with car parts suppliers. To reduce reliance on the motor line, PICC will expand the sale of accident and short-term health insurance products that it developed with its minority shareholder, American International Group (AIG), in late July. To reduce unrealised investment losses from equity exposure, PICC will increase asset allocation to fixed-income securities, while shortening the duration of its bond holdings to ward off price risks from rising interest rates. New investment assets would be used to buy mainly five-year or shorter-duration bonds and floating rate notes, Mr Wang said.