Changing China: Insurance industry spreading wings   2002-10-28 09:52:28 The fledgling Chinese insurance industry got its start only a decade ago. Though there is much room for improvement, major changes have taken place among the insurance companies. And public awareness of insurance has improved dramatically during the past few years. In a happy moment for Chen Haifeng, she received 10,000 yuan as the first installment from her insurance company. Five years ago, Chen bought investment insurance, which was something new in this country. Now, the company has returned 20 percent of the total insurance money to her as promised. Chen only wishes that she had bought more. Chen said: "When I first bought insurance five years ago, few people had any idea of what insurance really was. I even doubted its credibility at that time." For a long time, saving money in a bank was the main way for elderly people to prepare for their old age. Buying life insurance had been regarded as especially unlucky since it involves death. Yet this concept has gradually been changing with the growth of insurance companies around the country. China's economic reforms have had profound implications in the development of insurance markets. The government has gradually stepped aside as the lender of last resort. The social security system, health care and housing have all been reformed. The risk now rests with individuals and enterprises. As a result, these developments have boosted the demand for commercial insurance from enterprises and individuals seeking to protect themselves against risks. China has a huge market of 1.3 billion people, yet its insurance industry takes up less than 2 percent of its economy, much lower than the world average of 6 percent. Premiums exceeded 210 billion yuan, or some 30 billion US dollars, last year, and the growth trend is tremendous. Yang Xinyao, an insurance consultant, said he has seen a huge surge in demand for insurance information. Each day, his company sees more and more new customers. Many even buy insurance as a gift for family members and friends. Aside from traditional life insurance, various forms of insurance, including medical and travel, have become hot sellers. Wang Yanguan, service Manager of China International Travel Service, said: "In the past, most Chinese people would not spend money on travel insurance. But now, their insurance awareness and risk protection have greatly improved." Manager Wang Yanguang told us that more than half of travellers had voluntarily bought unexpected injury insurance this year, something that had never happened before. Wang even predicted that more people will learn to use insurance to protect themselves. Wang's call is being heeded by many. Having tasted the benefits of insurance, Chen Haifeng is thinking of buying other forms of insurance. And more Chinese are getting used to the concept of insurance, and are willing to spend money on it.