Abstract
In 2013, total assets in China’s insurance industry reached 8.29 trillion yuan, net assets reached 847.47 billion yuan, and funds in operation amounted to 7.69 trillion yuan. Original insurance premium revenue was 1.72 trillion yuan, of which property insurance premium revenue was 648.12 billion yuan and life insurance premium revenue was 1.07 trillion yuan. There as 621.29 billion yuan in claims paid. The proportion of Chinese insurance revenue to GDP has gradually increased (see Fig. 5.1).
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Notes
- 1.
Source: CIRC website “2013 nian baoxian tongji shuju baogao [Insurance Statistical Data Report 2013]”
- 2.
Source: CIRC “Zhongguo baoxian zhongjie shichang baogao (2012) [China Insurance Intermediary Market Report 2012]”.
- 3.
Source: CIRC website, “2013 nian di yi jiedu quanbu baoxian gongsi changfunengli dabiao [All Insurance Companies Meet Solvency Standards in First Quarter 2013],” June 13, 2013.
- 4.
Property insurance mainly considers profit spread and cost spread.
- 5.
Impacted by the U.S. financial crisis and European debt crisis, the capital market fell from its 2007 high of 6124 points. Although it experienced a rally from October 2008 to August 2009, the overall trend was a market downturn.
- 6.
Source: Huang Lei, “Baoxianye shenxian xunhuan rongzi guaiquan, jianbing chongzu chao buke bimian [Insurance Industry Trapped in a Vicious Cycle of Circular Financing, M&A and Restructuring Inevitable],” August 29, 2012, Shanghai zhengquanbao.
- 7.
The CIRC’s 2012 annual report shows that participating insurance premium income accounted for 80.2 % of life insurance premium income. In the life insurance market, the dominance of participating premium income is a prominent problem. There is insufficient development of products with long payment terms, strong guarantee functions, and which can satisfy the real guarantee demands of consumers. Because participating insurance has the characterstics of lower-limit gains and special dividends, the returns on capital use fluctuate. That is, capital market trends have an outsized influence on the stable development of participating insurance business and thereby on the stable development of insurance business. Because the stock market is in poor condition, insurance investment income has fallen. The China Insurance Annual Report shows that the trend of returning insurance policies continued unabated in 2011, with 95.8 billion yuan in insurance policies returned for the full year, a rate of 2.6 %.
- 8.
Property insurance rates are composed of pure rates (expected loss) and additional rates (management fees, marketing expenses, etc.). With regard to the same risk object, the pure rate should be the same. The difference should be the additional rate, but the additional rate makes up a relatively small proportion of the overall rate. Therefore, the rate gap between two companies insuring the same object of property insurance should not be too large.
Reference
Jiang Xianxue (2009) Zhongguo baoxian baozhang jijin zhidu yanjiu [The China Insurance Security Fund System], Xinan caijing daxue chubanshe
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© 2016 Social Sciences Academic Press and Springer Science+Business Media Singapore
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He, D. (2016). The Main Risks Faced by China’s Insurance Industry. In: Financial Security in China. Research Series on the Chinese Dream and China’s Development Path. Springer, Singapore. https://doi.org/10.1007/978-981-10-0969-3_5
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DOI: https://doi.org/10.1007/978-981-10-0969-3_5
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