Latest News:  
Beijing   Light to moderate rain/Light rain    13 / 8 ℃  City Forecast

English>>China Business

Insurers teeter on abyss amid antipathy for deeper reform

By Feng Jianmin (Shanghai Daily)

09:49, November 19, 2012

Chinese insurance companies may be facing a bleaker than usual winter.

Despite steps by the China Insurance Regulatory Commission to expand investment options for insurers, lasting weakness in the stock market and shrinking demand for life insurance products continued to weigh on the companies' performance in the first three quarters this year.

Earnings report for China's four listed insurers painted a grim picture.

China Life Insurance Co's profit dropped 55.6 percent from a year earlier, while China Pacific Insurance Group Co reported a 55.3 percent decline.

On the brighter side, at least on paper, New China Life Insurance Co said profits edged up 2.4 percent. Ping An Insurance Group Co reported 10.8 percent growth in net, but those gains mostly came from banking businesses, which were included in their financial reports for the first time this year.

The four listed insurers reported an aggregate 45 billion yuan (US$7.2 billion) in losses related to declines in the securities market in the first nine months.

For the industry as a whole, withdrawals by policyholders eased a bit in the third quarter but still loomed. China Life spent nearly 10 percent of its revenue covering withdrawals, while New China Life spent 15 percent, according to the performance reports.

On a quarter-to-quarter basis, profit declines were magnified. China Life net plunged 155 percent in the third quarter from the second, while profit at New China Life was down 63 percent, according to data compiled by Dongguan Securities.

"Given their shrinking assets, the investment yields for all listed insurers were lower than last year," said Deng Mao, an analyst with Dongguan Securities. "The stock market has shown no sign of improvement, and insurers will still face high costs from compensation claims and withdrawals."

Share prices of insurance companies got a boost in the first half of the year, amid expectations that regulatory efforts to expand investment options and products would help an industry on the abyss.

But disappointing investment returns and delays in kicking off a pilot project on tax-deferred pensions dimmed investor optimism. Insurance stocks, all Shanghai-listed, dropped more than the Shanghai Composite Index.

【1】 【2】 【3】


We recommend:

A Decade of Fastest Development

Eastern Boom Lightens Western Gloom

Chinese firms 'potential Trojan horses'? slows

AVIC unveils new aircraft engines

Oct. data released, inflation slows

13th Int'l Automobile Industry Exhibition

China Int'l Industry Fair opens in Shanghai

Caofeidian coal wharf put into use

Galaxy Soho building in Beijing

Email|Print|Comments(Editor:梁军、厉振羽)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. China's stealth fighter concept model

  2. PLA Macao Garrison finishes 13th rotation

  3. Unforgettable moments in Nov. (III)

  4. Flight test of unmanned aircrafts conducted

  5. First inter-blood-type liver transplant in China

  6. Harbin Autumn Automobile Exhibition

  7. Embroider best wishes on insoles in Shanxi

  8. China's rich people will reach to 280 million

Most Popular

Opinions

  1. Commentary: Hot money needs cooling
  2. Smart solutions for better city, better life
  3. China remains an 'engine' in global economy
  4. M&A of listed companies gaining steam
  5. Is 'culture' inferior to 'commercialization'?
  6. Chinese liquor makers "sober up" over bans
  7. Strength of Chinese culture lies in understanding
  8. Securing China's e-commerce growth
  9. Hammered ore prices threaten Chinese iron miners
  10. CNN Beijing chief: China's challenges, opportunities

What’s happening in China

Landmark building should respect the public's feeling

  1. Herders, sheep flock move to winter pasture
  2. First inter-blood-type liver transplant in China
  3. HIV patient to sue hospital over cancer op refusal
  4. Test in intelligent vehicle for food detection
  5. Smart card, dumb refund rules