China H1 Insurance Premium Income Tops US$124 Bln

China's insurance industry realized 805.66 billion yuan (US$124.6 billion) of premium income in the first half of the year, rising 13 per cent year on year, according to statistics released by the China Insurance Regulatory Commission (CIRC) on Friday.

Insurance capital applied reached 5.3 trillion yuan, and obtained 103.11 billion yuan of investment return with an average rate of return of 2.1 per cent.

Wu Dingfu, chairman of the CIRC, revealed that the total property insurance premium income amounted to 235.96 billion yuan in the first half, growing 16.9 per cent year on year, while life insurance reported premium income of 569.7 billion yuan.

However, Wu pointed out four challenges for the industry's development:

First, the industry's growth was facing pressure as China's recent interest rate hikes make return rates of some life insurance products lower than bank deposit rates, leading to decrease in insurance sales.

Secondly, due to inflation and interest rate hikes, China's capital market fluctuations made it harder for insurance companies to match their assets with liabilities.

Thirdly, pressure from the transformation of the industry's businesses was rising.

Fourthly, a gloomy capital market and interest rate rises have significantly affected the solvency adequacy ratios of insurance companies.