How China’s insurance industry evolved; A timeline after ‘reform and opening up’

PUBLISHED : Monday, 10 April, 2017, 12:26pm
UPDATED : Monday, 10 April, 2017, 10:28pm

1980 -- The People’s Insurance Company of China resumed its business, becoming the first operating insurer after more than 20 years of business suspension due to domestic political struggle.

The company had been operating as a subsidiary of the People’s Bank of China, until 1984 when it gained independence as a state-owned company, but still reported to the PBOC.

1980 – The People’s Insurance Company of China formed a joint venture with AIG and registered the company in Bermuda, with each party investing US$2.5 million.

1984 – AIG chairman Maurice Greenberg met with then PBOC governor Chen Muyun in Beijing

1988 – Ping An Insurance won an insurance business from the PBOC, making it the second eligible insurer. State backed China Merchants Group and the Shenzhen branch of China Industrial and Commercial Bank were the only two shareholders.

1991 – PBOC issued policy requiring insurance companies to be run separately from banks. Approval for insurance licenses accelerated. Insurers with mixed ownership emerge. Taikang insurance was founded 1996; New China Life was founded 1996; Anbang was founded in 2004.

1992 – Shanghai picked as a pilot for insurance opening up, and a branch of American International Group’s (AIG’s) life insurance unit got the first approval for foreign life insurer to operate in China

1995 - The Insurance Law of the People’s Republic of China, restricted insurance companies to offering either life or property insurance, but not both.

1998 – The China Insurance Regulatory Commission (CIRC) was set up, becoming the nation’s top regulator. Ma Yong Wei appointed as the first CIRC chairman from 1998-2002, followed by Wu Dingfu, who helmed the agency from 2002-2011.

2004 - CIRC allows foreign-owned property and casualty insurance companies to turn their China subsidiaries into wholly-owned subsidiaries. Foreign life insurance companies in China required to maintain joint venture operation with Chinese partners capped at a 50 per cent ownership stake.

2004 – The CIRC unveils Rules of Solvency Reporting of Insurance Companies, which set out prudential and standardised requirements for liabilities. A quarterly solvency reporting system and a specialised financial analysis system was established.

2011 – Total asset under the insurance industry reached 6 trillion yuan (US$867.8 billion), while standard insurance premium income reached 1.4 trillion yuan.

October 2011-- Xiang Junbo appointed CIRC chairman after resigning as chairman of the Agriculture Bank of China

2012 – Xiang issued a set of new policies, known informally as “13 new insurance rules” by industry insiders. One important policy expanded the range of permitted investments by insurance funds, opening a channel for investment into overseas equities.

2014 – CIRC raised the ratio of assets that insurers can invest in stocks and private equity to 30 per cent, up from 25 per cent.

2015 - CIRC further boosts the equity investment ratio to 40 per cent from 30 per cent after domestic equities are hammered in a stock market rout that wiped out trillions of yuan worth of market value.

2016 – Total assets under management by the insurance industry reaches 1.5 trillion yuan as of November, up nearly 150 per cent from 2011. Standard premium income rises to 2.9 trillion yuan, double from levels in 2011.