On February 3, the executive meeting of the People's Government of Guangzhou adopted the Implementation Plan for Accelerating Development of Modern Insurance Service Industry, which includes support for investment in the real economy with insurance funds, application of insurance mechanism to enhance guarantee for people's livelihood and support for insurance agencies to make investment in the health and elderly care industries.

 

Compared with Beijing, Shanghai and Shenzhen, Guangzhou has far less legal person organizations engaged in insurance industry.

 

At the press conference held on February 4, Zhou Jianjun, director general of Guangzhou Municipal Office of Financial Work, said that, in recent five years, the annual compound growth rate of insurance premium has reached 10.11%, higher than the growth rate of the local GDP during the same period. In 2014, the insurance premium income of Guangzhou reached RMB60.041 billion, up 26.50% year-on-year. There are 85 players in the insurance market of Guangzhou, with total assets of RMB178.5 billion.

 

However, there are still some problems and insufficiency in the insurance industry of Guangzhou. For example, compared with the economic and social development of Guangzhou and the increasing demand of the people for insurance guarantee, both the insurance penetration and insurance density of Guangzhou are at a lower level. Data in 2014 indicate an insurance penetration of 3.62% and an insurance density of RMB4,728/person; the asset size of the insurance industry of Guangzhou is smaller than that of other financial sectors, only accounting for 3.42% of the total banking assets.

 

In addition, compared with Beijing, Shanghai and Shenzhen, Guangzhou has less legal person organizations engaged in the insurance industry. Currently, Guangzhou only has three such organizations, while Beijing, Shanghai and Shenzhen respectively has 62, 48 and 18. What's more, in Guangzhou, related industries still lack awareness of using commercial insurance.

 

Great efforts should be made to explore government service outsourcing and introduce commercial insurance agencies.

 

In accordance with the Plan, Guangzhou aims to accelerate the development of the modern insurance service industry from five aspects, including application of the insurance mechanism to promote development of real economy, improve social governance and enhance people's livelihood guarantee as well as enhancement of construction of the insurance market system and greater support for the insurance industry.

 

It is worth mentioning that, the Plan requires that, the insurance mechanism should be used to promote the development of real economy ; support should be provided for investment in real economy with insurance funds; insurance organizations should be guided to serve small and micro businesses through the operation of policy-based micro loan guarantee insurance and other types of insurances; efforts should be made to encourage commercial insurance to participate in the social security system; innovation of endowment insurance service should be made; support should be provided for insurance agencies to make investment in the elderly care industry.

 

Zhou said, last year, Guangzhou made some exploration in using commercial insurance to promote guarantee of people's livelihood. Take the medical insurance for serious illnesses for example. Guangzhou Municipal Human Resource and Social Security Bureau organized a series of bidding activities. "Many commercial insurance agencies participated in the bidding. One agency has been selected. Specific plan is being made and will be put into practice this year. We hope that the government will outsource and contract out some of its services concerning some industries and sectors to commercial insurance agencies to improve the development of the related industries," Zhou said.

 

Zhou said that it is a long-term and hard task to develop the modern insurance service industry so that it needs the participation and cooperation of related government departments, district governments and insurance agencies. The Plan set out 20 tasks concerning 25 government departments and units and 11 districts. For the next step, related departments should base on the Plan to ensure that the major programs will be substantially put into practice and the goals will be fulfilled.

Source: Nanfang Daily, February 6, 2015