The People's Insurance Companyof China (PICC) earned 85 percent of the country's national property insurance premium income and about 60 percent of the industry's profits last year.

But the company reports it is not resting on its laurels. With the light at the end of the tunnel representing a fast-moving and competitive World Trade Organization (WTO) locomotive, the company is rapidly adjusting to new foreign and domestic competitive pressure. The country's No.1 property insurer said it is moving ahead with the all-out reform of its operational and management systems to sharpen its competitive edge. Despite a gloomy earnings picture for state-owned enterprises (SOEs) last year, this large scale SOE reaped 44.1 billion yuan in premium income and realized a profit for the fourth consecutive year, its largest ever. However, "domestic insurance companies will face challenges than opportunities when China joints the WTO," Sun Xiyue, PICC's general manager, said during a recent national conference. Although PICC holds an advantageous position in terms of brand name, networks, its staff, sand its understanding of the local culture, it lags behind foreign counterparts in capital funds availability, its solvency margin, operations mechanisms, cost control, technology and funds management experience, he said. Pressure is coming also from domestic players. In the coastal city of Shenzhen, where financially strong foreign and domestic insurers have congregated, PICC feels the threat clearly. "In addition to the U.S.-based AIU Insurance Co. which was recently licensed to operate in Shenzhen, Ping An Insurance Company of China and Hua An Insurance Co. have also been making big strides in recent years," said Wang Yincheng, general manager of PICC's Shenzhen Branch. Ping An has won the support of international intermediary organizations and is planning to list abroad, he said. "We must speed the optimization of our management system, lowercosts and improve computerization levels to compete," said Sun.

One major task would be improving service quality.

PICC is expected to introduce the ISO9000 quality system to itsbranches nationwide this year to bring the company's operations into line with international standards.

Moreover, the company will establish a nationwide service hotline at 95518 this year to settle remote claims.

To transform PICC into a real commercial company, the company set up fund and coast management systems to improve efficiency of funds utilization.

It expects to improve its assets structure by collecting non-performing assets and by controlling its scale of fixed assets.

Profitability will become a prime consideration in appraising the achievements of branch managers.