Since 2011, premium income in China’s life insurance market has declined due to nascent regulatory activity according to a report, China Insurance Market and Technology Trends 2011, authored by Wenli Yuan, a Senior Analyst with Celent’s Asian Financial Services Group, Celent, Boston MA.
In 2008, life premium income was growing at 49%. Due to the global financial crisis, the premium growth rate fell to 12% in 2009 and later rebounded to 30% in 2010 where it seemed it was poised to continue growth. However, as a result of customer dissatisfaction caused in part by misleading information and exaggerated yields exhibited by sales personnel in China’s bank assurance industry, the China Banking Regulatory Commission (CBRC) prohibited insurance company personnel from being stationed at banks, thwarting premium income through the banking channel. Celent contends that overall, the more regulated approach will benefit the bank assurance channel in the long run.
The CIRC has also put into place new accounting standards that align themselves with current international standards. The new standards were implemented January1, 2010.