Chairman of the China Insurance Regulatory Commission (CIRC) Wu Dingfu said on Thursday the current insurance categories restricted the roles that the country's burgeoning insurers could play in the compensation for this year's snow disaster.
Chinese insurers paid 3.7 billion yuan (529 million U.S. dollars) in total for the snow disaster in Jan-Feb period. The funds, however, covered only a small portion of the total damage, Wu said on an industry forum on Thursday. Figures released by the Ministry of Civil Affairs showed the snow storms ravaged 19 provinces, killed 129 people, and caused 151.65 billion yuan in losses.
CIRC has urged insurers to simplify procedures and present the utmost flexibility in the disaster compensation. But the indemnity coverage was still far from enough.
Catastrophe insurance, which is critical in tackling serious disaster, is still weak in product design and implementation, said Li Dongfang, manager of the property insurance sector of the China United Property Insurance company.
Most of the victims of the snow havoc, notably in the rural areas, could not afford the insurance premium, senior manager of the Shanghai-based Taiping Life Huang Yiping found in his recent survey. Insurance was deemed as an investment tool, rather than a safety net for some of the people in the snow-stricken areas. Once they found their insurance brought nothing profitable, they chose to quit the plan before the advent of the disaster, he said.
Huang said it is really worrying that a large group of people still stay out of the protection of both the commercial insurance and social security net. He suggested the current design of insurance products should be improved to cover more categories in case of unexpected catastrophe.
China's insurance sector saw its premium revenue increase from 460 million yuan (65.71 million U.S.dollars) in 1978 to 700 billion yuan last year, the ninth biggest in the world, Wu told the forum.
He reiterated reform is still needed to bring industry development in line with the changing situation.
He stressed the agriculture insurance should be expanded on pilot projects, and the micro-insurance scheme for farmers should move forward.
(Xinhua News Agency April 12, 2008)