By Wang Lan (China Daily)
Updated: 2007-08-10 11:31

The combined premium income of domestic and foreign insurance companies in Shanghai increased 9.04 percent in the first six months of 2007 to 23.92 billion yuan, ranking third in the country after Jiangsu and Guangdong provinces, according to figures released yesterday by the China Insurance Regulatory Commission Shanghai Bureau.

"The booming stock market has diverted a chunk of money from insurance products that yield much lower returns than potential gains from stock investments," said Zhu Jiwei, deputy director of the life insurance department of CSRC's Shanghai Bureau.

What's more, "the increase in bank interest rates have made certain fixed-return insurance products less attractive", said Li Feng, director of the bureau.

Shanghai's insurance industry took in premiums totaling 23.92 billion yuan, accounting for 6.43 percent of the aggregate premium volume in China.

In the first six months of this year, Shanghai's premium income in property insurance increased 17.9 percent year-on-year, to 6.87 billion yuan, and life insurance gained 5.84 percent, to 17.05 billion yuan, over the same period.

The premium income of foreign insurance companies in Shanghai increased 35.64 percent to 5 billion yuan, taking up a 21.61 percent share of the city's insurance market.

The increasing surrender ratio in some life insurance products offset the premium income of insurers, especially of local insurance companies.

The surrender money paid by life insurance companies jumped 107.7 percent to 3.96 billion yuan from the year before. The largest surrender ratio went to participating insurance products, notching up 30.26 percent, much higher than the average surrender ratio of 23.27 percent for all life insurance products.