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Investment-Linked Insurance Emerges in Market
A band-new life insurance---investment-linked insurance came into being recently in Beijing market under which part of the premium paid by customers would be invested on securities and funds by professional of insurance companies. Its appearance in Beijing market in early April roused extensive interest from consumers. This insurance coverage presented first by China Ping'an Insurance Company in Shanghai last October found favor with the clients in Shanghai market, cutting a figure in investment-related insurance in the inland of China.
Investment-linked insurance is a new insurance coverage integrating traditional life insurance and investment, a mainstream insurance coverage in the present world. The difference between it and the ordinary life insurance is that part of the premium paid by clients will be injected into special investment account as investment funds, which will be operated by professionals in the company through the investment channels such as securities and funds. The investment risk and return are to be borne by the client who's free to terminate the contract if s/he is not satisfied with the operation results of the insurance company.
According to Li Jinmiao, person in charge of the life insurance office of Pacific Insurance Company, since its entry into Beijing market a month ago, nearly 2000 clients made this coverage. Among them, Mr. Wang, a manager of a technology trade enterprise in Beijing covered the insurance policy with the highest coverage value of three million and a 20-year term. He had to pay an annual premium of 170 thousand yuan. He thought that with the integration of China's insurance industry with the international circle, investment-linked insurance would have a large arena for manoeuvre and development. Besides, he felt assured of the investment managed by professionals with expertise.
The vice manager of Ping'an Insurance Company has a view that compared to the traditional life insurance, the investment-linked insurance has a greater transparency, flexibility and complexity, thus setting a higher requirement on the business management of insurance companies. The investment return is the vital line of investment-linked insurance. Only by achieving a higher return from the investment than an average market level can a long-term and stable development of the business be guaranteed. In this sense, the competitors of insurance companies are not only those from the same trade but from the entire financial industry too. In addition, new products pose higher requirement on salespersons who must bear in mind both insurance and investment knowledge. Ms. Wang said that China Pacific Insurance Company has formed an investment expert team responsible for the operation of investment accounts.
Wu Xiaoping, Vice Chairman of China Insurance Supervisory Committee pointed out that China's life insurance industry is at a crucial stage of product transformation. The product innovation and exploration should be encouraged to enrich the insurance varieties in order to meet the diversified needs of the masses on insurance.
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