CHINESE PREMIUM TO TOP YUAN1TRN BY 2010

Chinese authorities are predicting the country will take total premium of Yuan1trn ($145.8bn) within two years. Based on current figures, that would make China the sixth-largest insurance market in the world, behind only the US, the UK, Japan, France and Germany. Last year the market accounted for total premium of $92.5bn, up from $70.7bn in 2006, putting it in 10th place. But growth predicted by the China Insurance Regulatory Commission (CIRC) could send it leaping ahead of South Korea, the Netherlands, Italy and Canada and into sixth. However, the country’s per capita premium income remains low. At Yuan600 per head it is just one-eighth of the figure in many foreign countries, according to CIRC official, Shu Gaoyong. Still, growth has been steady at 20% per year since 2003 and insurance assets have increased significantly as well, reaching Yuan2.9trn last year compared with Yuan600bn in 2002. Gaoyong has predicted that home insurance penetration will grow to 4% per capita, premium spend to Yuan750 and insurance assets to more than Yuan5trn by 2010. In its latest sigma study, Swiss Re warned that life insurance growth in China could slow this year because of a weakening stock market. Meanwhile, although the sigma report suggested the strong economy and the benefit of the Olympic Games should support growth in non-life premiums, it also pointed to price competition and the severe snowstorms earlier this year as factors possibly denting profits.