A General Introduction to the Chinese Insurance Business

A General Introduction to the Chinese Insurance Business -...

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A General Introduction to the Chinese Insurance Business Introduction of the History of Chinese Insurance Industry The emergence of modern insurance in China can be dated back to the 19th century. However, the insurance industry was paused after 1959 for 20 years. The current Chinese insurance industry re-started and developed from 1980’s. In 1984, the State Council separated the state-run People's Insurance Company of China (PICC) from the People's Bank of China (PBOC) and offered standard insurance products such as life, property and reinsurance services. Between 1984 and 1998, over 10 smaller domestic insurance companies were established to create a more competitive domestic insurance market. In 1998, PICC was divided into three independent insurance companies China Life Insurance, China Property Insurance and China Reinsurance Co, according to the regulatory requirement of business separation between life insurance and property insurance. In the 1990s, China further gave the approval to the non state-owned domestic insurance companies. Foreign insurance companies were first introduced to China in 1992. American International Group (AIG), Tokyo Marine and Fire Insurance and Winterthur Swiss Insurance were the first three foreign insurers entering Chinese market during 1992 to 1996. The access of foreign insurance players were restricted to geographic markets as well as their scope of business at that time to protect the domestic insurers. Currently, almost all the limitations have been lifted because of the WTO accession commitments made by Chinese government. Although the history of the contemporary Chinese insurance business has only 20 years old, The fast development of Chinese Insurance is remarkable as well as rapid growth of its national economy. The high-speed development can be evidenced partially by the rapid growth of national premium income and growth rate from 1999 to 2006. Statistics show that at the end of 2006, the total premium income has reached 564.14billion in RMB, which has increased by 15.10 percent than that of 2005. The growth rate of total premium in the recent 5 years is over 10 percent each year, and averagely at 23.18 percent. Fig. 1 The National Premium Income and Growth Rate Year Property Insurance Premium (in RMB, Billion) Life Insurance Premium (in RMB, Billion) Total Premium (in RMB, Billion) Growth Rate of Total Premium (%) 1999 52.11 87.21 139.32 2000 59.84 99.75 159.59 14.55 2001 68.54 142.40 210.35 31.81 2002 77.83 227.48 305.31 45.14 2003 86.94 301.10 388.04 27.10 2004 108.99 322.82 431.81 11.28 2005 122.98 369.74 492.73 17.30 2006 150.94 413.20 564.14 15.10 2006 ECOMOMY Life Insurance Property Insurance MARK ETS GDP e USD BILLION GDP Per Captail e USD e Growth Rate of Real GDPe %e Premium e USD BILLION e Insura nce Depth Insuranc e Density Premium e USD BILLION e Insur ance Depth Insura nce Densit y USD
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Year Property Insurance Premium
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A General Introduction to the Chinese Insurance Business -...

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