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Leading Chinese Insurers may Turn to Central and Western Regions for Expansion

Posted on Mar 25, 2010 by Sergio Ulloa ()  | Tags: China Health Reform, China Insurance Market

Residents in developed cities in Continental China are starting to show less interest in buying insurance products and it is expected that the leading insurance groups will set their sights this year to capitalise in the development of the central and western regions of the country. The top three Chinese insurance companies in Mainland China, China Life Insurance Co., Ping An Insurance (Group) Co. of China Ltd. and China Pacific Insurance (Group) Co. based in Beijing, Shenzhen and Shanghai respectively, correspondingly reported back in January of this year premium revenues of US$6.13 billion (CNY 41.8 billion), US$3.2 billion (CNY 21.8 billion) and US$2.48 billion (CNY 16.9 billion), recently boosting the interest on their shares from investors at the stock market. The latest report compiled by HSBC Insurance showed that Chinese consumers are more willing to put their savings into bank accounts, chiefly worried about inflation, regardless of the fact that the Chinese economy actually has made a turnaround since the financial crisis. By so doing, it becomes hard for insurers to see the revenue from premiums increase in cities like Shanghai, Beijing and Guangzhou and that is a good reason why the insurance companies may focus their market development strategies into second-tier cities in central and western China. The pace of implementation of the medical reform in China may provide a window of opportunity for the commercial insurance companies to adopt the aforementioned strategy, making it a win-win situation for both urban and rural residents. It remains to be seen whether the lower profits, heavier taxes, and less developed economy in some regions will diminish the enthusiasm of these commercial insurance service providers to offer managed medical insurance services. Insurance Companies mentioned: China Life Insurance Co. China Life Insurance (Group) Company and its subsidiaries constitute the largest commercial insurance group in Mainland China. It is the only domestic insurance group with an asset exceeding 1 trillion RMB yuan. It is also one of the largest institutional investors in China's capital market. Ping An Insurance (Group) Co. of China Ltd. Ping An Insurance (Group) Company of China, Ltd ("Ping An" or "the Group") is the first integrated financial services conglomerate in China that blends its core insurance operations into securities brokerage, trust and investment, commercial banking, asset management and corporate pension business to create a highly efficient and diversified business profile. The Group was established in 1988 and headquartered in Shenzhen, Guangdong Province, China. China Pacific Insurance (Group) Co. China Pacific Insurance (Group) Co., Ltd. (CPIC) was established on the basis of China Pacific Insurance Co., Ltd., which was founded on May 13, 1991. Headquartered in Shanghai, its registered capital stands at RMB 7.7 billion. The company was listed in Shanghai Stock Exchange on Dec. 25, 2007, with the stock code of 601601 and the stock name of " China Pacific". The Company was listed in the Stock Exchange of Hong Kong Limited on Dec. 23, 2009, with the stock code "02601" and the stock name of "CPIC".
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