Nanfang Daily (Reporter/Zhang Xilu) The Implementation Plan for Accelerating the Development of Modern Insurance Service Industry was adopted on the at the standing meeting of the municipal government on 3rd this month. This Plan suggests supporting the investment in real economy with insurance funds, utilizing the insurance mechanism to strengthen protection of people's livelihood, and supporting insurance institutions to invest in health and elderly care industry.  

The number of legal entities in the insurance industry in Guangzhou far much smaller than that in Beijing, Shanghai and Shenzhen

At the press conference held on 4th this month for the standing meeting of the municipal government, Zhou Jianjun, Director of Guangzhou Municipal Bureau of Financial Work, introduced that the compound growth rate of the annual average insurance premium in the insurance industry in Guangzhou reaches 10.11%, higher than the concurrent GDP growth rate in the region. In 2014, the income from insurance premium in Guangzhou is RMB 60.041 billion, growing by 26.50% year-on-year. There are 85 entities in the insurance market in Guangzhou, and the total assets in the insurance industry amount to RMB 178.5 billion.  

However, some problems and imperfections also exist in the insurance industry in Guangzhou. For instance, relative to the economic and social development in Guangzhou and the growing needs of the people for protection against risks, the insurance penetration and insurance density in Guangzhou is at a lower level. Take the data in 2014 as an example. The insurance penetration rate and insurance density in Guangzhou is 3.62% and RMB 4728 per person. Compared to other financial industries, the insurance industry in Guangzhou has a smaller size of assets, which is equivalent to only 3.42% of the total asset of the banking industry.

Moreover, there are only 3 legal entities in the insurance industry in Guangzhou, much fewer than with that in other cities like Beijing (62), Shanghai (48) and Shenzhen (18). In addition, relevant industries in Guangzhou are not highly aware of the use of commercial insurance.

Exploring the possibility of introducing commercial insurance institutions to outsourced services for government

It is put forth in the Implementation Plan that Guangzhou will accelerating the development of modern insurance service industry in 5 ways, i.e., supporting the investment in real economy with insurance funds, utilizing the insurance mechanism to improve the level of social management, using the insurance mechanism to strengthen protection of people's livelihood, strengthening construction of insurance market system, and strengthening support to the insurance industry.  

It is worth to mention that the Implementation Plan requires using the insurance mechanism to promote the development of real economy, supporting the investment in real economy with insurance funds, guiding insurance institutions to launch small- to micro-sized insurance service businesses such as policy-driven small loan bond insurance, encouraging the inclusion of commercial insurance in the social security system, actively creating new endowment insurance services, and supporting insurance institutions to invest in health and elderly care industry.

According to Zhou Jianjun, Guangzhou has done some active exploration in using commercial insurance to promote protection of people's livelihood, such as medical insurance against major diseases, for which the Human Resources and Social Security Bureau of Guangzhou Municipality organized a bidding activity last year. He said, "Many commercial insurance institutions participated in the bid and it is confirmed that 1 institution has been chosen. The detailed scheme is now being worked out and will be implemented very soon this year. We also hope that the governmental duties in certain industries and departments may be outsourced or contracted out to commercial insurance institutions, so as to raise the standard of relevant industries."

Zhou Jianjun admitted that it is a long-term and difficult task to develop modern insurance service industry and the joint participation and combined efforts by relevant functional departments in the municipal government, district governments and insurance institutions are needed. The Implementation Plan has a list of 20 tasks relating to 25 governmental departments and units and 11 districts. In the next step, relevant departments will ensure the implementation the key tasks and successful achievement of the set targets according to the Implementation Plan.