BEIJING: China is to begin massive reform of its insurance industry by introducing foreign insurers in an attempt to transform the state-owned operation into a sophisticated publicly-traded operation, the China Daily reported.
It quoted senior government representatives as saying that by introducing more private and foreign capital, the government planned to diversify the capital structures of shareholding insurers.
Reform would also include increased attention to the battle against illegal industry practices, the officials said.
Wu Dingfu, the newly appointed chairman of the China Insurance Regulatory Commission (CIRC) acknowledged that one of the most difficult tasks would be transforming China’s outdated state-owned insurers into credible, listed firms.
Particular attention will be paid to the People’s Insurance Company of China (PICC), the country’s largest non-life insurer, life-insurance giant China Life and China Re, the mainland’s lone reinsurer.
“I believe that there will surely be breakthroughs in the reforming of China’s state-run insurers and there will be public flotations this year,” Wu said.
The State Council, China’s cabinet, has already approved reform plans for PICC and China Life.
China’s insurance sector premiums hit a record 305.31 billion yuan last year, a 44.7% increase over 2001.
Property insurance accounted for 77.83 billion yuan while life insurance premiums soared 59.8% to 227.48 billion yuan, according to figures cited by the China Daily. – AFX