Chinese insurance companies’ premium income rose 31 percent in the first two months of this year to reach Rmb1.19 trillion (about US$173 billion), according to the China Insurance Regulatory Commission (CIRC).
The official data showed that growth in the January-February 2017 period declined substantially from the same period last year, when Chinese insurance firms’ premium income growth increased 51.5 percent.
Life insurance companies posted the steepest decline in premium growth on a year-on-year basis. According to the CIRC, premium income of life insurers hit Rmb1.02 trillion, up a mere 35 percent, compared to the 63.8 percent growth in the same period last year.
Property insurance companies’ premium income rose 10 percent to Rmb165.4 billion.
Analysts attributed the slower growth of premium income to the regulator’s measures to better regulate universal life insurance.
Meanwhile, China’s major insurers and life insurers are expected to release disappointing 2016 financial results, although analysts remain upbeat in the sector’s performance this year.
Analysts said the lackluster 2016 performance of Chinese insurance companies was due to fierce competition, depressed investment returns, and reserves top-ups.
In a research note, analysts at CLSA said Ping An is the only major insurer likely to post profit growth for the year although the insurer is still expected to report lacklustre performance.
In January, China Life made a pre-announcement, warning investors that its 2016 profit was likely to fall up to 50 percent on year. New China Life also warned that its profits could drop by as much as 45 percent.
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In terms of property and casualty, CLSA said extreme weather, including massive rainfall and storms in northern China in the second half of 2016, incurred large damage claims, particularly in the agricultural sector. – BusinessNewsAsia.com