Insurance premium income of Chinese insurers grew at a slower pace in the first three quarters of this year as regulators stepped up efforts to curb growth through risky investments and instead focus on traditional insurance products.
Insurance companies’ premium income rose to 3.05 trillion yuan ($460 billion) during the period, up by 21 percent year-on-year. It was 11.17 percentage points slower than the figure of the same period last year, data from the China Insurance Regulatory Commission showed on Nov 9.
“The slower growth represents a healthier development of the industry, as the curbs on high-yield products, such as universal insurance, to contain financial risks have taken effect,” said Wang Guojun, an insurance professor at the University of International Business and Economics in Beijing.
Proportion of the income from the ordinary life insurance segment in the total income of life insurance business rose by 13.18 percentage points from the end of last year to 49.38 percent, while that of universal insurance, a type of investment-focused life policy, decreased by 18.48 percentage points to 18.37 percent, according to data from the CIRC.
“As China is slowing its economic steps for a more stable and healthier economic environment, protection products can bring more benefits in the long run, as high yield products are less reliable to the national economy. Besides, the present growth rate is already a high one,” Wang said.
Insurers’ profits in the first three quarters stood at 185.7 billion yuan, up by 18.3 percent year-on-year, according to the CIRC.
The regulator attributed the steady growth to improved corporate structure, internet-based business and risk management.
In addition, the rising Chinese stock market led by the surges in the CSI 300 Index and SME board’s index this year is also considered one of the key forces boosting profit growth.
“Insurers’ investments have gained better profits due to the robust capital market this year,” said Duan Haizhou, an official with the CIRC. “The return on investment in stocks exceeded 50 billion yuan with total capital return rate of 4.05 percent, 0.1 percentage point higher than that in the same period of last year.