Despite the difficult conditions, China’s insurance industry amassed CNY1.43 trillion (US$227 billion) in premiums for 2011, making it an increase of 10.4% y-o-y, said the CIRC.

CIRC Chairman Xiang Junbo said at a national insurance work conference that despite the steady growth, there are still deeply-rooted problems within the industry that need to be addressed promptly. This is as the international financial market experienced volatility last year and certain risks had increased. On the domestic front, the economy in China is also slowing down while capital markets are declining, he noted.

He believes that the industry will face bigger challenges in 2012 and urged insurers to find ways to increase their capital with a focus on issuance of subordinated, convertible, and hybrid bonds.

He also asked CIRC officials to increase their efforts in risk monitoring, supervision and solvency scrutiny of insurers. He said that a number of insurance companies do not attach importance to building up international management and innovation of products and services which leads to the deterioration of their competitiveness. He added that there are companies which are only concerned for market share and even flout the law in their pursuit. He stated that the current pattern of development that relies too heavily on gross premium growth with too few products, needs to be changed as it has not met the demand from the public, and called for insurers to innovate more in product design and service.

The CIRC also reported that property premiums increased by 19.5% to CNY461.79 billion in 2011, while life insurance premiums rose by 6.8% to CNY969.98 billion last year.