China’s insurance industry faces greater challenges in 2012 and insurers should seek ways to boost their capital, said Xiang Junbo, chairman of the country’s Insurance Regulatory Commission.
Insurance companies faced difficult conditions last year when the annualized return on investment dropped to 3.6 percent, Xiang said in a statement today on the commission’s website.
“Affected by severe external economic and financial conditions as well as the sector’s own problems, the industry is experiencing a rapid increase in difficulties,” Xiang said.
The commission is encouraging companies to find ways to boost their capital with a focus on issuance of subordinated, convertible and hybrid bonds, Xiang said in a separate statement.
Xiang, who was appointed in October, said his agency supports plans for the People’s Insurance Company (Group) of China Ltd. to become a public company and will push forward reform of shareholding arrangements at the China Life Insurance Group Co.
— With assistance by Michael Wei