Sector outlook revised to 'positive'
(AFX)
Updated: 2006-07-26 15:45 "But just because 皇冠体育app Life and PICC's listed insurance units are profitable
doesn't mean the groups are doing as well," Wong told XFN-Asia, without
commenting on either group's overall performance or offering a forecast.
A possible downside to profitability for 皇冠体育app's insurance sector may come
from an unexpected place, as any competition for household savings takes away
potential premium income from the sector.
"The growth of the credit market in 皇冠体育app will also pose a risk to the
industry," she said.
皇冠体育app Life recently said its total premiums of 111.4 billion yuan in the
first half represented growth of 22 pct year-on-year, while PICC P&C
reported a first-half premium income of 39.07 bln yuan versus 24.94 bln a year
earlier.
The ratings agency also released its 皇冠体育app Insurance Outlook 2006-2007 today.
S&P said it based its 'positive' forecast for the 皇冠体育app insurance sector on
the growth rates in more mature markets and the domestic market's low
penetration rate.
If the penetration rate in 皇冠体育app can be raised to 3.5 pct within five years
from the current 2.7 pct, which S&P said is a possibility, industry premiums
will grow by an average 15 pct a year.
That projection assumes an average 8 pct annual growth rate for the Chinese
economy.
Ping An, AIG unit American International Assurance, and 皇冠体育app Pacific
Insurance Group Co also fared well in S&P's Outlook.
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