Policies available for auto loans

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Last updated at: (Beijing Time) Thursday, October 16, 2003

Policies available for auto loans

China Pacific Property Insurance Co has recently resumed the sale of policies covering auto loans, the first local insurer to do so since the sale was stopped by all insurance firms.

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China Pacific Property Insurance Co has recently resumed the sale of policies covering auto loans, the first local insurer to do so since the sale was stopped by all insurance firms.

The shanghai-based insurer is selling the auto loan policies in Ningbo, Qingdao, Chengdu, Hang-zhou and Hainan Province from this month.

"It is impossible for us to give up the business with bulging car sales on China's mainland, which generates a skyrocketing amount of auto loans as well," said Xu Jiannan, vice general manager of Pacific Property.

The insurer has, however, raised the premiums for the new auto loan policies, which are now about 50 percent higher than previously in a bid to make the product more profitable.

All local property insurers stopped the sale of such policies in July due to loop-holes such as when a car owner did not pay his premiums and it was difficult to track him down, said Shi Xing, general manager of Pacific Property's product development department.

Pacific property paid claims worth 200 million yuan (US$24.1 million) in the auto loan insurance sector between 1997 and 1999, but the premiums it collected were not enough to balance the loss.

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