China Life Insurance Co, the country's largest life insurer, launched small-amount rural life insurance products Tuesday, marking the opening of the Chinese small-amount rural life insurance market.
The insurer launched four personal insurance products, three group insurance products and two insurance products for small-amount credit borrowers, including life, accidental injury and traffic accident insurance.
Pilot versions of these products will be available in Guangxi, Gansu, Heilongjiang, Shanxi, Jiangxi, Hubei, Henan, Qinghai and Sichuan provinces later this month.
Famers there can pay a premium of 10 yuan ($1.46) to 100 yuan a year for an insured amount of 10,000 to 50,000 yuan covering against accidents.
Though accidental injury and death rates of the rural population are higher than those of urban areas, these products were designed to be non-profitable with lower premiums in accordance with their low income levels, said a China Life official.
In the short term, the small-amount rural life insurance business may not be profitable, but it is an important move for the company to expand presence in the country's broad rural areas, said the insurer’s president Wan Feng.
China Life also rolled out two insurance products for small-amount credit borrowers: One is a fixed-term life insurance for small-amount credit borrowers and the other is accidental injury insurance.
"These two products can protect low-income farmers against financial losses incurred by accidental injury and diseases, and ease the risks of financing institutions," said Chen Wenhui, assistant chairman of the China Insurance Regulatory Commission.
Chen said after the commission issued a plan on small-amount rural life insurance pilots in June, eight insurance companies applied to conduct the business. Eventually China Life was selected to become the first pilot insurer.
The commission issued favorable policies such as broadening sales channels and lowering regulatory fees to boost the popularization of the small-amount rural life insurance.
(Chinadaily.com.cn August 14, 2008)
