The insurance industry needs to boost demand for its products and improve its credibility, experts said yesterday, following the release of key data for the sector by the country's insurance regulator.
"To ordinary people, many insurance products are still luxury goods, not a necessity. Better-off customers are buying insurance products not for the purpose of insurance, but to seek investment returns," Zhong Ming, dean of the Insurance Department with Shanghai University of Finance and Economics, told the Global Times yesterday.
"When the stock market becomes sluggish, the demand for insurance also declines. That's not a sustainable growth pattern for the insurance sector," she said.
The total value of the country's insurance premiums reached 1.43 trillion yuan ($226.4 billion) last year, up 10.4 percent year-on-year, according to data released by the China Insurance Regulatory Commission (CIRC) over the weekend.
Despite the steady growth, the insurance industry is still facing deep-rooted problems, Xiang Junbo, chairman of the CIRC, said over the weekend.
"Many insurance companies do not attach importance to strengthening internal management or offering innovative products and services, leading to the deterioration of their ability to compete in the industry," Xiang said.
A research report released last week by BOC International Holdings identified other problems facing the industry.
Premium revenues in both banking and insurance channels are unlikely to rise significantly, the rate of cancellation of insurance products is on the rise, and the relatively low salaries for insurance marketing personnel makes it hard to attract staff, said the report.
"Due to the low threshold of access to the industry, the quality of insurance practitioners varies widely. Some unqualified practitioners compete viciously for customers by misleading them into buying products they don't understand, which tarnishes the image of the industry," Sun Qiang, an insurance agent in Beijing, told the Global Times yesterday.
