China's insurance sector is expected to have a good prospect in premium income this year while suffering from tumble of investment profit.

"The total premium income of China's insurance industry is expected to reach 1 trillion yuan in 2008," Wu Dingfu, chairman of China Insurance Regulatory Commission (CIRC), told an annual national insurance meeting held in Beijing on Saturday.

The premium income topped 915 billion yuan (US$133.8 billion) in the first 11 months this year, up 42 percent year-on-year, while the investment profit plunged sharply, Wu said.

CIRC statistics showed life insurance premium income reached 699.14 billion yuan in the first 11 months, up 51.8 percent from the same period last year when property insurance premium income increased 17.5 percent year-on-year to 215.91 billion yuan.

In contrast, the country's insurance investment profit tumbled 66.7 percent year-on-year to more than 93 billion yuan.

The investment income stood at 279.17 billion yuan in 2007, exceeding the total number of the previous five years.

Experts attributed the income slump to a weak investment market this year. China's domestic stock market shrank to less than 2,000 points by December from its peak last October, which stood above 6,000 points.

At the same time, insurance compensation expanded to 267.5 billion yuan, up 32.7 percent year-on-year.

"Regions hit by blizzards in January and earthquake in May have received the insurance compensation of 5.5 billion yuan and 1 billion yuan respectively," said Wu.

Wu said the country's insurance industry remained in good shape amid domestic and global economic slowdown while expecting more challenges next year.

(Xinhua News Agency December 28, 2008)