(Yicai Global) March 14 -- Total premium incomes in China's life insurance sector slumped 11.4 percent in January, continuing a downward trend from last year as original premium income declined.
Original premium income totaled CNY560 billion (USD89 billion) in the first month of the year, down more than quarter from last year, state-backed online news outlet The Paper reported today. Life insurers had logged double-digit growth in the previous four Januaries. Some 33 of 74 life insurance companies with comparable statistics from January 2017 recorded an annual drop in original premium income, with 15 posting a decline of more than 50 percent.
Total premium income is the total amount of premiums collected by an insurer during a certain period, and represents the insurer's cash flow conditions. It comprises three components: original premium income, investment money paid by insurance buyers (most of which comes from universal life insurance products) and premiums paid into segregated accounts for investment-linked insurance products.
There were four main factors for the declining income at life insurers, according to insiders. The first was that consumers have less money to buy insurance products due to external reasons, such as industrial adjustments, and the second was increased competitiveness among banks' wealth management products.
Insurance regulatory policies have also prompted the sector to refocus on its principal business, leading to the exit of medium- and short-term products and an impact on premiums. The final reason was trouble recruiting insurance sales agents, which has become more difficult as falling premiums hack away at workers' wages.
Despite the dip in original premium income, universal life insurance and investment-linked businesses saw a rapid increase in premium revenue. Insurance investments not included in insurance contract accounting and premiums paid into segregated accounts at life insurers jumped almost 95 percent on the year to CNY194 billion in January.