China quake’s $20-billion damage show insurance abyss

Font Size

Print

Feedback

Email

Discuss

Save & Share Article

What’s this?

Digg	My Yahoo	Fark
del.icio.us	Newsvine	Reddit

Rate This Article

Rating:  0

The most powerful earthquake in China since 1950 shows the nation’s insurance industry is decades behind those of the world’s biggest economies.

Just 5 percent of the more than $20 billion of damage from the quake in Sichuan province is covered by insurance, according to estimates from an official at the China Insurance Regulatory Commission. By contrast, about half of the $120 billion of estimated costs from Hurricane Katrina, the most expensive storm in US history, was insured by companies or the federal government, data compiled by analysts at Jersey City, New Jersey- based Property Claim Services show.

“The earthquake underscores how much room insurers have to penetrate into rural China,’’ said Zhang Ling , who oversees $1.1 billion for ICBC Credit Suisse Asset Management Co. from Beijing and holds Ping An Insurance (Group) Co. shares.

China Life Insurance Co. and Ping An, the nation’s biggest insurers, have yet to extend their reach across China, where only 4 percent of the nation’s 1.3 billion people have insurance, according to data compiled by KPMG International. By contrast, 77 percent of Americans own some type of life insurance policy.