Quick Take: Sales of Risky Insurance Products Plunge on Regulatory Crackdown
The sales of China’s universal life insurance products dropped a hefty 55.1% year-on-year over the first eight months of the year, official data shows, as the country’s regulator continued to crack down on risky operations.
From January to August, life insurance companies took in 417.4 billion yuan ($63.4 billion) from the sale of universal life insurance, a type of short-term policy that combines a high-return investment with a minimal death benefit, according to data released on Monday by the China Insurance Regulatory Commission.
Universal life insurance policies have been a major target of a government crackdown since late last year. Regulators are concerned that such short-term products allow small insurers to raise huge amounts of cash quickly to fund investments in securities and the illiquid real estate market, creating uncertainty for the insurers’ cash flow and liquidity management.
The insurance regulator has issued a series of new rules in recent months to unearth violations and fix problematic businesses connected with the risky products. The regulator’s latest policy document, which was issued in May and is slated to be fully implemented in October, is likely to ban most short-term, investment-focused life insurance products.
As former CIRC head Xiang Junbo, an advocate of a more liberal market, was recently expelled from the ruling party after a corruption investigation, the industry is awaiting whether liberalisation measures rolled out under Xiang’s tenure will be dialled back.
Life insurers’ premium incomes rose by 22.6% year-on-year in the first eight months of this year to 2.08 trillion yuan, according to the data the insurance regulator released on Monday. Property insurers generated 690.1 billion yuan in premium income, up 14.4% from the same period in 2016.
The total assets of life insurers have grown 3.1% since the start of this year to 12.8 trillion yuan and total assets of property insurers have increased by 4.4% to 2.5 trillion yuan.
Contact reporter Dong Tongjian (email@example.com)
Aug 07 16:15
Aug 07 15:42
Aug 07 04:24
Aug 06 19:23
Aug 06 19:01
Aug 06 17:30
Aug 06 16:01
Aug 06 14:18
Aug 05 18:04
Aug 05 17:20
Aug 05 17:03
Aug 05 16:47
Aug 05 15:15
Aug 05 13:25
Aug 04 17:56
- 1Exclusive: Ant Group Aims to Raise $30 Billion in Record-Shattering IPO
- 2Chinese Researchers Find Mutation That Could Make Covid-19 10 Times More Infectious
- 3TikTok Shifts Global Operations Base to Europe
- 4China Dodges Corporate Bond Default Bullet but Outlook Is Darkening
- 5China Plans to Give Foreign Investors More Market Access
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas