Yaan earthquake fails to rock insurers' profits
With claims from the Yaan quake expected to be low, insurance companies are likely to see income growth as the stock market recovers
Mainland insurers are poised for profit growth in the second quarter, with insurance claims after the recent Yaan earthquake not expected to be high, while investment returns and premium income are likely to improve.
Minsheng Securities estimated that insurance claims after the Yaan earthquake in Lushan county, in Sichuan province, on April 20 would be no more than 100 million yuan (HK$125 million), while Guotai Junan Securities forecast that the claims would be less than 200 million yuan, far lower than the 1.66 billion yuan claims after the earthquake in Wenchuan, also in Sichuan, in 2008.
Minsheng Securities estimated that insurance claims after the Yaan earthquake in Lushan county, in Sichuan province, on April 20 would be no more than 100 million yuan
The insurance coverage in the quake area was low, Zhang Lei, an analyst with Minsheng Securities, said in a research report.
If the economic loss for the Yaan earthquake was less than 10 billion yuan, the insurance claims would be up to 100 million yuan, Zhang said. The economic loss for the Wenchuan earthquake was 845.1 billion yuan.
The insurance density in the area, measuring premiums per capita, was only 761.17 yuan last year, lower than the average of 1,018 yuan in the province, while the insurance penetration rate was 2.96 per cent, against an average of 3.43 per cent in the province, Zhang said.
The Yaan tragedy would have put pressure on property and casualty insurers such as Ping An Insurance, PICC P&C and China Pacific Insurance, but the impact would not be material, said Chen Xingyu, an analyst with Phillip Securities.
