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Insurers in China see sharp drop in profits

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Insurers in China see sharp drop in profits

(Reuters) — Falling investment returns pulled profits of Chinese insurance firms sharply lower by 35.7% to 156.96 billion yuan ($23.09 billion) in January-September from the same period a year earlier, the country's insurance regulator said Tuesday.

Investment returns slumped 19% year-on-year to 482.9 billion yuan ($71.04 billion) for the first three quarters, said Duan Haizhou, deputy head of the statistics information department at the China Insurance Regulatory Commission.

Property insurance companies saw their profits drop by 29% year-on-year to 48.2 billion yuan ($7.09 billion) for the January-September period, while life insurers' profits declined more sharply by 47% to 82.0 billion yuan ($12.06 billion), according to the CIRC.

Insurers in China have been struggling with a low interest rates environment, while the stock market downturn has also reduced the investment returns they earn to cover payments on insurance policies since the second half of last year.

Insurance asset management companies' profits went up 24% to 5.6 billion yuan ($823.8 million).

Despite shrinking profitability, China's insurance sector continued to expand rapidly over the first nine months. Its total asset grew to 14.63 trillion yuan ($2.152 trillion) by the end of September, an increase of 18% since the beginning of the year.

Total insurance premium incomes for the first nine months reached 2.52 trillion yuan ($370.69 billion), surpassed 2015's full year amount.

Domestic insurance companies continued to dominate the market this year, with foreign insurers' market share edged up slightly to 5% by end-September. 

 

 

 

 

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