China allows 2 more banks in insurance sector

The Bank of China and China Minsheng Banking Corp have been given the go-ahead by the China Insurance Regulatory Commission (CIRC), state media reported.     

The two banks join the mainland's Industrial and Commercial Bank of China and China Construction Bank, and Hong Kong's Hangseng Bank and Bank of East Asia on the list of banks providing insurance, Xinhua news agency said.     

Insurance premiums through bancassurance channels rose 153 per cent in the first half of 2008, accounting for more than half of the total premiums from life insurance.     

"Bancassurance is expected to grow much more rapidly as more commercial banks are permitted to sell insurance products," Wang Xiaogang, an analyst with Orient Securities Company Ltd was quoted as saying by the agency.     

CIRC has however warned against the risks that an unduly fast growing investment oriented insurance sector might incur, including weakening of insurance companies, uncertain investment risks and possible mass withdrawal of insurance funds, it said.     

Insurance premiums amounted to 561.79 billion Yuan ($80.3 billion) in the first half of 2008, a 51 per cent rise over the same period last year. It included 431.86 billion Yuan in life insurance, a 64 per cent rise.