China promoting microinsurance across nationLife microinsurance has been developing rapidly in China since 2008; now, the insurance regulator is launching a national initiative targeting the poor.
China has over 700 million people living in rural areas, making it a huge market for the microinsurance business. According to the new Scheme, CIRC intends to further develop domestic rural insurance.
Microinsurance in China is still in a fledgling phase, but it has been developing rapidly. In 2008, the Chinese government launched a life microinsurance pilot project. China Life, China Pacific Insurance, Taikang Life and New China Life were selected as the first batch of pilot companies to offer microinsurance within nine provinces.
It now covers 24 provinces, with premiums totalling RMB 1.06bn (134.7m euros) at the end of 2011. The number of people who are covered by life microinsurance has ballooned from 2.39 million in 2008 to 24 million in 2011. At the same time, trial microinsurance products have expanded from the most basic accident insurance and term life policies to health insurance.
On the other hand, in addition to cancelling the qualification approval procedure, the Scheme also introduces a stricter regulation for the service providers. The Scheme stipulates that life microinsurance should be orientated to serving low-income groups.
The products of life microinsurance are limited to ordinary term life insurance, accident insurance, as well as sickness insurance and medical insurance; the sum insured should be between RMB 10,000 (1,270 euros) and RMB 100,000 (12,705 euros).