Shanghai's investment-linked products grew rapidly last year
with overseas insurers the main players, the local regulator said
yesterday.
Insurers in Shanghai are faced with challenges including the
tightening monetary policy and fluctuations of the stock
market.
Shanghai accounted for 18 percent of China's total
investment-linked insurance market while overseas insurers
contributed to a 73.22-percent share of that market in the
city.
Overseas insurer's investment-linked insurance premiums grew
more than 10-fold last year in Shanghai as insurers promoted
products whose performance was linked to last year's bullish
capital market.
The benchmark Shanghai Composite Index grew more than 80 percent
last year after soaring 130 percent in 2006.
Investment-linked life insurance is a plan where the value of
benefits are, wholly or partly linked to the investment performance
of a separate investment-linked fund. When a policy owner pays a
premium for the policy, a portion of the premium will be allocated
to insurance while the balance will be made to buy units in the
investment-linked funds.
There is a question as to whether insurers can sustain the rapid
growth of this type this year when the capital market is so
uncertain.
Property and casualty insurers also face challenges this year
after making large payouts following the worst snowstorms in the
city in half a century.
Property and casualty insurers have received 42,197 claims for a
combined loss of 910 million yuan (US$127.1 million) up to February
15. Insurers have already paid out 20.08 million yuan. Life
insurers have received 450 claims asking for total payment of 3.2
million yuan.
Insurers collected premiums worth 48.26 billion yuan last year
in Shanghai, up 19.43 percent on the previous year.
(Shanghai Daily February 22, 2008)
