Yingda Taihe Property Insurance and Dongfeng Automobile Co., Ltd. (SHSE: 600006) held a cooperation signing ceremony.

Under the cooperation, the auto maker will change “presenting prizes to customers” to “presenting Auto Insurance products of Yingda Taihe to customers” based on transforming the internal marketing incentive forms, open up other insurance renewal businesses all dealers and service stations having opened in all provinces to the insurer. The insurer will expand the claim service network relying on the nationwide service stations of the listed company.

According to the strategic deployment, the cooperation is to take Hubei Province as a pilot and expand across the country gradually. Currently, the auto maker has fully started cooperation with the Hubei branch of the insurer to totally set up more than 20 single outlets. After the pilot cooperation is basically mature, they will promote the mode to all provinces it has entered.

Premium revenue in March came to CNY 34.4 billion, decreasing 10.42% from a year earlier, a speed lower than that in Feb. Premium revenue in the first two months dipped 6.15% year on year.

Such a decrease in premium, pointed out analysts for Shenyin & Wanguo Securities Co., Ltd., was caused by a steep fall in premium from individual insurance new policies as a result of a structural adjustment of the company. China Life is estimated to suffer a 40% decline in new insurance policies via bancassurance in March.

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About the Aviva 

Aviva is the world’s sixth largest insurance company providing customers with insurance, savings and investment products. We are the UK’s largest insurer and one of Europe’s leading providers of life and general insurance.

We have worldwide sales of £47.1 billion1 and £352 billion2 of funds under management. We have 36,100 employees serving around 44.5 million customers in 28 countries around the world.

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According to the statement, China has decided to open compulsory automobile liability insurance to foreign insurance companies and will officially implement related laws and regulations after modification. The China Insurance Regulatory Commission (CIRC) clearly expressed in August 2011 that it would consider opening compulsory automobile liability insurance to foreign insurance companies. Jin Jianqiang, director of the Insurance Association of China said on November 16 that compulsory automobile liability insurance was likely to be opened to foreign insurance companies in China within 2012.

China now has 20 foreign property insurance companies. Due to the fact that compulsory automobile liability insurance is not opened, only a few foreign insurance companies run commercial vehicle insurance businesses, such as Samsung, Cathay Insurance, Allianz and Hyundai.

The debt issues will be subject to regulatory approval. The total CNY 15 billion debt financing will increase NCL’s solvency to around 250%, said China International Capital Corporation in a report, which can sustain its growth in coming two to three years. But China Merchants Securities warns that the debt financing will increase the insurer’s financial expenses in 2012, which will affect its net profit by over 10%.

NCL, which debuted on Hong Kong Stock Exchange on December 15, 2011 and listed on Shanghai Stock Exchange on December 16, had 27.74% solvency ratio at the end of 2008 and 36.19% solvency ratio at the end of 2009, far lower than the minimum regulatory requirement. It placed CNY 14 billion worth new shares to shareholders in late 2010 and issued CNY 5 billion subordinated bonds in the third quarter of 2011.

As at the end of September 2011, the solvency level in Chinese insurance industry dropped due to sharp fluctuation in capital market. NCL’s solvency ratio fell to 86.58%, compared with the 100% ratio required by China Insurance Regulatory Commission.

The Beijing-headquartered life insurer had planned to raise about USD 4 billion from dual listing in Shanghai and Hong Kong, but later had to cut the size to approximately CNY 12 billion amid the volatility of stock market.

With substantial improvement in the solvency, NCL will be eligible for overseas investment and investment in unlisted companies, real estate, non-secured debt financing plans and infrastructure debt financing plans, according to its IPO prospectus.

According to China Insurance Regulatory Commission’s new rules for subordinated bond issue, an insurer whose solvency ratio is lower than 150% or will be lower than 150% in coming two years can apply to issue subordinated bonds, but the outstanding principals and interests of subordinated bonds should not exceed its unaudited net asset in the previous year.

If NCL is approved to issue CNY 10 billion subordinated bond, its subordinated bonds outstanding will amount to CNY 15 billion, close to the 50% ceiling of its net asset. But its solvency ratio will rise above 200% following the subordinated bond issue.

Ping An Insurance (Group) Company of China Limited in late 2011 announced issue of not more than CNY 26 billion convertible bonds. Analysts comment that debt financing instrument is still an attempt by insurance companies and there is no regulation whether proceeds from debut financing can be reckoned into an insurer’s solvency.

Xiang Junbo, chairman of CIRC, said this January that CIRC encourages insurers to replenish capital and ease solvency pressure in various ways with focus on subordinated convertible bond, hybrid capital bonds and subordinated term bonds. CIRC will study and work out relevant rules to widen the channels for insurers to replenish capital.

Sino life insurance, incorporated in March 2003, had CNY 56.6 billion total assets and CNY 50.679 billion liabilities as at November 30, 2011. It obtained CNY 22.21 billion premiums in the first 11 months of 2011, representing a year-on-year increase of 59.6%. Meanwhile, net profit totaled CNY 302 million.

The Shenzhen-headquartered life insurer takes it the top priority to build an insurance group, modeling on Ping An Insurance (Group) Company of China Limited, said a source. It will boost the development of existing life insurance and asset management business and will prepare for other business units, which are pending regulatory approval. Zhang Jun, chairman of Sino Life Insurance, said last September when Sino Life Asset Management Co. was opened, that Sino Life Insurance has applied to set up a property insurance company and an insurance marketing company, and that it was growing toward a financial conglomerate. The insurer also plans to set up a pension insurance company and a Hong Kong subsidiary of Sino Life Asset Management Co.

Yu Longhua, head of China Insurance Regulatory Commission Shenzhen Bureau, comments that Sino Life Insurance will probably become another version of Ping An Insurance (Group) Company of China Limited in coming 30 years.

As building an insurance group will take a long time, that means Sino Life Insurance will not be able to go public within one or two years as planned. One of its major shareholders Shougang Group in early 2012 put up its 552 million shares in Sino Life Insurance for minimum CNY 1.765 billion, which it bought at a consideration of CNY 180 million.

The vendor set February 1 deadline for applying to bid for the shares and asks that a buyer should subscribe for 551.712 million new shares in the life insurer at a price of CNY 1 per share. Shougang Group expects to take more efforts to boost its core steel production business, which is the major reason for the share sale. Chinese steel industry will be under huge pressure arising from high output, high stockpiles, high costs and less demands in 2012, forecast Zhu Jimin, chairman of Shougang Group. Thus steel makers will be exposed to more risks of thin profit or loss.

If Shougang Group can sell these shares at CNY 1.765 billion, the return on investment will be equal to 80% of its profit in 2011. The steel giant got CNY 246 billion operating revenue and CNY 1.89 billion profit last year.

Of this, the original property insurance premium reached CNY 461.8 billion, increasing 18.54%, owing to the continuing booming commercial motor vehicle insurance, while the original life insurance premium was about CNY 972.1 billion, decreasing 8.57%, because of some factors such as the launching of new policy in bancassurance and Banks’ canvass for deposits.

The industry saw CNY 6.01 trillion total assets by the end of 2011, which increased 19.13% from the end of 2010. Of this, deposits outstanding and investments outstanding were CNY 1.77 trillion and CNY 3.77 trillion respectively, rising 27.51% and 17.43% respectively.

The above-mentioned insurance industry’s operating data was issued by the China Insurance Regulatory Commission (CIRC).

Of the top six life insurers by market share, China life insurance Co., China Pacific life insurance Co. and New China Life Insurance saw their market share increase respectively while Ping An Life Insurance Co., Taikang Life Insurance Co. and PICC Life Insurance Co. had smaller market share last year.

China Life Insurance, which reaped CNY 318.2 billion original premiums in 2011, remained to be the largest life insurer in China by a 33.28% market share. Its market share increased by 1.57 percentage points year on year. The market share of New China Life Insurance and China Pacific Life Insurance rose by one percentage point respectively.

Ping An Life Insurance Co., a subsidiary of Ping An Insurance (Group) Company of China Limited, got CNY 118.9 billion original premiums in 2011, which caused its market share to decrease 2.74 percentage points. But the company ranked No.2 well after China Life Insurance Co. in terms of absolute market share. Taikang Life Insurance got CNY 67.9 billion original premiums and its market share slid to 7.1% accordingly.

In addition, Taiping Life Insurance Co., Minsheng Life Insurance Co., Sino Life Insurance Co., Union Life Insurance Co., Huaxia Life Insurance Co. and Sunshine Life Insurance Co. saw their market share increase last year. Remarkably, Shenzhen-based Sino Life Insurance Co. reaped CNY 23.3 billion premiums in the year and its market share gained to 2.4% from 1.4% in 2010.

China’s new rules for bancassurance business and implementation of new accounting standards seemed have bigger impact on foreign-funded life insurers last year. Twenty-five foreign-funded life insurers out of the 60 life insurers obtained a total of CNY 38.6 billion premiums in 2011, whose market share declined as a whole.

Six foreign-funded life insurers including Manulife-Sinochem Life Insurance Co., AXA-Minmetals Assurance Co., AIA, Haier Meiji Yasuda Life Insurance Company Ltd., ING-BOB Life Insurance Co. Ltd. and HSBC Life Insurance Co. had bigger market share last year. While CITIC Prudential Life Insurance Co., BoCommLife Insurance Company Limited, Generali China Life Insurance Company Limited, AVIVA-COFCO Life Insurance Co., AEGON-CNOOC Life Insurance Co., Ltd., CIGNA&CMC Life Insurance Co., Heng An Standard Life Insurance Co., Old Mutual-Guodian Life Insurance Co., Sino-French Life Insurance Co., Huatai Life Insurance Co., Sino-US United MetLife Insurance Co. and Great Eastern Life Assurance (China) Co.,Ltd. saw the market share fall last year.

2011 witnessed original premiums of property insurance companies in China surged to CNY 477.9 billion from CNY 402.6 billion in 2010. Most of them had the premiums increase, and only three Chinese property insurers including Tianan Insurance Co., Alltrust Insurance Co. and DUBON Insurance Co. post decline in 2011 premiums.

The branch company is restricted to operate business within the administrative area of Shanghai municipality.

Headquartered in Guangzhou, Allianz China General Insurance is a foreign-owned corporate insurance company solely invested by Germany-based financial group Allianz SE. Before restructuring, the company was referred to as the Guangzhou branch of Allianz that was established in 2003. The Guangzhou branch has set up marketing service departments in cities like Shenzhen, Dongguan, Foshan and Jiangmen, harvesting more than CNY 290 million premium in 2009.

Germany-based Allianz SE has also co-founded Allianz China life insurance with CITIC Trust. The life insurance subsidiary officially opened for business in January 1999 and is the first joint-ventured life insurance company approved to set up in Mainland China, in which Allianz SE holds a 51% stake.

The vice minister continued that by the end of 2011, there were 360 million people participating in social security system and over 100 million senior residents in urban and rural areas got basic pension from the government. According to Hu, urban and rural resident basic pension system will achieve full coverage within this year, marking roughly completion of basic social security system framework focusing on pension, medical insurance and subsistence allowances.

He added that 4 provinces, over 40 cities and 100 counties had got successful experiences so far and that overall planning of urban and rural resident basic medical insurance would be enhanced this year.

As for premium, PICC Property and Casualty now ranks No. 1 in Asia and No. 7 in the world among comparable non life insurance companies. The SSE is China’s only national shipping exchange jointly established by the Ministry of Transport and Shanghai municipal government.

Based on the agreement, PICC Property and Casualty will provide comprehensive insurance cover for the SSE while the SSE will actively support PICC Property and Casualty’s insurance business and will preferentially choose PICC Property and Casualty as its insurance business partner under the same conditions.

Jeevan Ankur is specially designed to meet the educational and other needs of the child, LIC said.

It is the most suitable insurance plan for parents who have a child aged up to 17 years, for this plan ensures that their responsibilities are met under all circumstances, without depending on anyone else, it said.

The plan covers the risk on the life of the parent and the named child shall be the nominee under the plan, it said.

In the event of the unfortunate death of the parent during the policy term, the basic sum assured is payable immediately on in-force policies, LIC Senior Divisional Manager R K Jha said.

In addition, an income benefit equal to 10 per cent of the basic sum assured is payable to the nominee child from the policy anniversary coinciding with or immediately after the death till the end of policy term, it said.

This will ensure the continuity of the child’s education without any additional burden, it said.

Not only this, it said, the nominee child will also get a lumpsum amount equal to the basic sum assured on the predefined maturity date of the policy along with loyalty additions, if any, to support higher education or a start in professional life.