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The reports showed that the three giants, including China Life Insurance Co., Ltd. (NYSE: LFC, SEHK: 2628, and SHSE: 601628), Ping An Life Insurance Company of China, Ltd., and China Pacific Life Insurance Co., Ltd. in August saw year-on- year rises of 94%, 33.6%, and 57% in their premium revenues, less than the growths of 98.7%, 47.9%, and 87% for the previous month.
In detail, China Life's monthly premium revenues stepped down this year. For the first quarter, the life insurer achieved monthly premium revenues of CNY 34.05 billion. For the second quarter, the figure declined to CNY 26.634 billion. And those in July and August were CNY 20.984 billion and CNY 22.159 billion, respectively. The hot-selling single-premium bancassurance products, which are of low profit rates, signals the aggravation of China Life's business structure and poorer profitability.
Pacific Life is also confronted with the problem about its product structure. Although in the first half of this year, the life insurer's premium revenues from bancassurance business soared 149% year on year and the number kept going up in July and August, its settlement rate for universal life insurance started to go down. People in the insurance circle believed that Pacific Life in the coming year would adjust its business structure, striving for a value-driven growth.
As for Ping An Life, although it has not been hammered heavily by the decline of bancassurance business, the changes in its universal life insurance settlement rate and the premium revenues might be a sign of decline that investors should pay attention to.
In addition, some life insurers who boomed through the rises of bancassurance business suffered steep drops in their premium revenues in August. On the one hand, fluctuation of the stock market cut the sales of investment-linked insurance policies. On the other hand, some bancassurance products were curbed by regulators, according to a head at a life insurer.
In Shanghai, the nation's financial hub, bancassurance premiums plunged to CNY 1.44 billion in July, and CNY 1.249 billion in August, compared with CNY 2.223 billion in June and CNY 1.765 billion in May.
There is a trend that bancassurance business is to shrink in the last few months of this year. The China Insurance Regulatory Commission, the nation's top insurance watchdog, previously ordered that in the last four months, the growth of bancassurance business should slow down.
(USD 1 = CNY 6.83)
From www.hexun.com, Page 1, Monday, September 22, 2008 info@SinoCast.com
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