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Ping An Insurance (Group) Company of China, Ltd. (601318.SH), based in the southern boomtown Shenzhen, achieved bancassurance premiums of CNY 16.3 billion in the first six months of this year, rising 137.7% compared to the same period of 2008, according to the interim report of the group. After Ping An successfully acquires Shenzhen Development Bank (SDB, 000001.SZ), the former is to have a much bigger platform for it to boost the bancassurance business, said market observers.
During the same period, two other leading insurers Beijing-based China Life Insurance Co. (601628.SH) and Shanghai-based China Pacific Insurance (Group) Company (610601.SH) saw declining bancassurance premiums, as the two were adjusting their life insurance product structures in the first half year.
The Beijing branch of China Pacific Life Insurance Co. realized premium revenues of CNY 780 million from the single-premium bancassurance business in the six months ended June 30, 2009, down 50% year on year; and the branch achieved CNY 155 million premiums from the regular-premium bancassurance business, an increase of 400%. The Beijing branch of China Life gained CNY 86.36 million premium revenues from the regular-premium bancassurance business, up CNY 50 million versus the same period of last year.
Some experts in the insurance sector thought that commercial banks and insurance companies have to beak the status quo, to turn from the product-oriented cooperation into the equity cooperation.
Actually, Bank of Beijing (601169.SH), Bank of Communications (601328.SH, 3328.HK) and Industrial and Commercial Bank of China (601398.SH, 1398.HK) have been reported to deepen their cooperation with some small and medium-sized insurers through making equity investment into the latter.
Earlier, Beijing and Shanghai reportedly were adjusting the bancassurance market. Life insurers in Shanghai are required to adjust their business structure. Meantime, they are expected to become customer demand oriented by selecting most suitable products for different customer groups, according to the Shanghai bureau of China Insurance Regulatory Commission.
As for the Beijing market, under the Convention of Self-discipline of Banks and Post Offices as Insurance Agencies, Beijing fixes the maximum bancassurance commission standard for 10-year-less single-premium insurance products at 3.2%, that for over-10-year single-premium insurance products at 3.5%, that for five-year-less regular-premium products id at 7%, and that for insurance products between five to 10 years at 8%, and that for over-10-year products at 12%.
(USD 1 = CNY 6.83)
Source: www.hexun.com (August 26, 2009)
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