Chinese Insurers Told to Improve ServicesA top Chinese insurance official has urged domestic insurance companies to revolutionize their existing services to adapt to possible challenges in the wake of China's accession into the World Trade Organization."They might be in a tight corner if they don't renew their products at once," Wu Xiaoping, vice-chairman of China Insurance Regulatory Commission, told participants at Thursday's symposium on China's life insurance industry. The two-day seminar, held at the Shanghai International Convention Center, was sponsored by Fudan University and Financial Times with major Chinese and foreign insurance companies attendance. The official told insurance firms to develop participating insurance and unit-link insurance to resist the risks brought about by the drop in bank interest rates. Insurance companies have suffered from seven drops in bank interest rates in 1996, from 10.98 to 2.25 percent. "The drops have driven many insurance companies into a corner," said the official. China's insurance industry developed slowly and insurance premiums increased at a low rate last year. Many companies have found that if their fixed rate is higher than the bank rate they will suffer from losses, but if they keep the same bank rate, their policies will be hard to sell. "Insurance companies should rely on themselves to expand their life insurance business rather than depend on the government help, " the official told participants. China lags far behind Western countries and even some developing countries in the insurance industry. The China Insurance Regulatory Commission has worked out a development plan for China's life insurance industry in the next five years, said Miao Fuchun, deputy general manager of the China Life Insurance Company. |
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