CHINA INSURANCE INTERNATIONAL POSTS 49% RISE IN INTERIM PROFITS

Hong Kong-based China Insurance International (CII) Holdings, a subsidiary of Chinese state-owned China Insurance Holdings and which operates mainly in mainland China, has posted a first half net gain of HK$488.5m (US$62.6m), up 48.8% from the HK$328.29m recorded in the same period last year. Gross written premiums and policy fees rose 17.8% to HK$8.32bn. The reinsurance business China International Re makes up more than two-thirds of CII’s earnings, contributing HK$311.5m for the half, up from HK$205.3m in H1 2006. The technical result of HK$31.88m was up from HK$26.54m, mainly due to an absence of significant claims. Gross premiums written were up 8.6% year on year to HK$1.32bn. The combined ratio at the reinsurance subsidiary fell 2.3 points to 80.8%. The life assurance subsidiary Tai Ping Life contributed HK$153.5m, up 19.5% year on year, on gross written premiums of HK$6.99bn, up from HK$5.84bn in H1 2006. The p/c subsidiary, Tai Ping Insurance — in which CII has a 40.25% stake — earned just HK$2.4m, down from HK$4.35m, on premiums of HK$1.79bn, up 86% from HK$959m in the same period last year. CII chairman Feng Xiaozeng said that the p/c business was performing satisfactorily, with the low net profit attributable to the fast rate of expansion, which had caused large upfront acquisition costs. “The Group now believes that TPI’s overall infrastructure, which has been gradually developed over the past five years, is now capable of supporting faster premium growth, which is critical to achieving reasonable economies of scale”. In July, Tai Ping Insurance increased its paid-up capital by 200% to 3bn yuan ($397m). It also recently established three new provincial branches, in Liaoning, Hebei and Yunnan. Mr Feng admitted that the p/c market in mainland China was currently “competitive”, but he remained confident that Tai Ping Insurance would “maintain its growth momentum and produce a satisfactory result during the second half of 2007”.