Insurance Intermediaries Contributed Most Premiums

China’s insurance intermediary institutions in 2010 contributed 72.01% of the total premiums.

According to the regulatory department China Insurance Regulatory Commission, the insurance intermediary channel of the country realized the premium revenues of CNY 1.04 trillion last year, going up 13.98% year over year. Of these, up to CNY 84.5 billion premiums were made by professional insurance agencies and insurance brokers; and up to CNY 492 billion were achieved by concurrent-business insurance agencies.

By last yearend, there were 2,550 professional insurance intermediary institutions in China’s Mainland, including 1,853 insurance agencies, 392 insurance broking companies and 305 insurance surveyors and loss adjusters. In addition, there were 189,877 concurrent-business insurance agencies in the country by the end of last year.

During the whole year of 2010, the nation’s professional insurance intermediaries earned the business incomes of CNY 11.8 billion, a year-on-year rise of 32.69%; and they saw the net profits increase 71.94% to CNY 815 million. Of the total, those insurance agencies gained the commission incomes of CNY 6.31 billion and the net profits of CNY 199 million, a year-on-year increase of 40.76% and 134.12% respectively. Those insurance brokers achieved the commission fees of CNY 4.4 billion and the net profits of CNY 571 million respectively, up 32.81% and 62.22% year on year. As for the concurrent-business insurance agencies, they earned the commission incomes of CNY 24.1 billion in the year, including the commissions of CNY 18.4 billion for the banking and postal channel.

This year, Guangzhou-based insurance agency Huakang financial has set the goal to launch a listing at home or abroad. Starting operation in 2006, Huakang financial in 2007 obtained the capital injection from IDGVC Partners and Matrix Partners, thus paving the way for the company to boost the nationwide expansion. By March 2008, Huakang financial opened the insurance agency companies in 14 provinces and cities across China’s Mainland. These provinces and cities include Guangdong, Hunan, Hubei, Sichuan and some others. In 2009, the insurance agency achieved the total premiums of CNY 860 million; branched out into 15 provinces; and saw the number of agents reach 20,000. This showed that the company had a suitable operating mode and development strategy and a clear market positioning.

Last year, the company realized the premium revenues of CNY 1.1 billion and saw the profit growth of over 30%. As required, an insurance agency expecting to get listed in domestic capital market has to make profit for three consecutive years. Therefore, Huakang Financial can be qualified to debut in the A-share market if it continues making profits in 2011.