China’s life insurers see fall in income as regulator crackdown bites, but e-commerce boom lifts online insurance business
Overall income from premiums falls in the first four months of this year
Premium income at China’s life insurers tumbled by 13.6 per cent year on year for the first four months of 2018, after the industry regulator cracked down on the issuance of short-term policies that it blamed for creating financial instability.
In a briefing on Friday, the China Banking and Insurance Regulatory Commission (CBIRC) said that total premium income for all insurers fell 7.84 per cent on year to 1.7 trillion yuan (US$258.6 billion) from January to April. Property insurers reported gains, with income up 16.1 per cent to 404.9 billion yuan.
Chinese life insurers have significantly reduced the issuance of short-term life policies in the wake of the regulator’s action, which began last year and was aimed at refocusing the industry on offering long-term protection to policyholders, rather than using money from short-term policies to pursue takeovers or buy assets.
“Life insurers have been actively adjusting their business structures and returning to the original nature of the insurance business – long-term protection,” Wang Wei, a CBIRC official, told the briefing.
She said that life insurance premium incomes were bottoming out, with monthly growth of 9.9 per cent in April after a decline of 26 per cent in January.
Meanwhile online insurers saw a surge in business in the four-month period, issuing 4 billion new policies, up 109.2 per cent year on year. Almost half of the policies were freight insurance, triggered by China’s booming online shopping industry. Premium income for online insurers surged by 85 per cent.
Insurance industry assets were 17.3 trillion yuan at the end of April, up 3.55 per cent from beginning of this year, the regulator said.