Expert on Reform and Development of China's Property Insurance

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Last updated at: (Beijing Time) Friday, November 23, 2001

Expert on Reform and Development of China's Property Insurance

China's entry into the World Trade Organization (WTO) will attract more insurance market players and forge a new and competitive market, which demands the further development and reform of China's property insurance industry.

Guo Zuojian, deputy director general of the Property Insurance Supervision Department of the China Insurance Regulatory Commission (CIRC), made this remark Friday at China's WTO Insurance Summit, which debuted November 22.

Guo pointed out that the CIRC will transform the management system of property insurance products from an "approval system" to a "field system". According to him, the CIRC has set up the Temporary System to Manage Property Insurance Products and Premiums, which regulates that the management, including terms and premiums of the property insurance products, adopt the record system. The new management system will help reduce the procedures of authorization and encourage the product innovation of insurance companies.

In the meantime, China has witnessed a reform of terms and premiums of motor vehicle insurance, which allows insurance firms to make more individual-oriented terms and premiums for specific vehicles and areas.

Guo said that with China's entry into the WTO, the CIRC will put more emphasis on supervising payment ability, setting up reinsurance regulations, and supporting insurance companies which provide all kinds of services based their own technological advantages.

The CIRC will also transform the management system of state- owned insurance companies through the shareholding mechanism. Statistics show that in the current domestic property insurance market, state-owned insurance companies account for 70 per cent of the market share.

In 2000, China's insurance revenue was 159.59 billion yuan. The revenue from property insurance was 59.84 billion yuan, an increase of 14.8 per cent, and property insurance accounted for 37.5 per cent of the total insurance revenue.

The two-day "summit", sponsored by the CIRC, was attended by hundreds of experts and insurance industry entrepreneurs from both at home and abroad, including some from the United States, Japan, Switzerland and France.

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