During the first two months of this year, the country's insurance industry reports gross premium receipts of 212.3 billion yuan (US$31.08 billion), an annual growth of 13.3 percent. But in some companies and in some provinces, a downward trend is already being felt.

Take the three listed major companies for instance. Business data revealed by China Life (SH: 601628; HK: 2628), Ping An China (SH: 601318; HK: 2318) shows that in January and February, 2009, these two companies respectively registered premium receipts of 67.2 billion yuan (US$9.8 billion) and 27.3 billion yuan (US$3.99 billion), or a growth of 12.63 percent and 43 percent year on year. However, during the same period, China Pacific Insurance Corporation (CPIC, SH: 601601) reports a decline of 14 percent, while its premium receipts totals 13.1 billion yuan (US$1.9 billion).

The China Insurance Regulatory Commission (CIRC) has noted the downward trend in the insurance business. On the afternoon of March 27, CIRC coordinated a meeting in Shanghai with the chief executives from 10 life insurance companies, including China Life, New China Life (NCI), PICC Life, Taikang Life, AIA, Sino Life, Haier New York Life and etc. The objective of the meeting was for the major insurance companies to share intelligence on the current situation, particularly that in Shanghai.

Optimism in Shanghai

During the meeting, the companies reported their business objectives and strategies to the CIRC, and they also shared with each other their performance to date in the year – elements such as progress in business transformation, the difficulties faced, and precautions taken amid the market risks. The chiefs were also invited to share opinions about the current sales mechanisms applying in the business.

"Judging from the authority's special attention to the Shanghai insurance market, CIRC is clearly worried that negative growth may occur in the city's insurance gross premium receipts this year," said an executive who attended the meeting. "But the CIRC itself remains uncertain if there will be growth or not."

In the meeting, most domestic companies were optimist about achieving growth in the Shanghai market this year. The growth rate was even expected to be from 10 percent to 20 percent.

Regarding this 'Shanghai optimism', the meeting's organizer Chen Wenhui, Assistant to CIRC Chairman, acknowledged that it exceeded his expectations.