Zurich Financial Services Group (Zurich) announced in April their plans to carry out a research project on microinsurance with Nan Kai University’s Department of Risk Management and Insurance (DRMI) in Tianjin, focusing on the demand for microinsurance products in China. This project is part of Zurich’s efforts to expand their insurance services offered in China to the under-privileged population segment.
The research project is meant to guide Zurich in the development of distributions partners, institutional linkages, and an effective way to educate low-income customers on the value and function of microinsurance products. The group aims to create a sustainable microinsurance network in China. Products and services must be commercially viable and beneficial to the poor.
China has a rural population of 800 million, the majority of which is low-income, making it a huge potential market for microinsurance. China Life and PICC Property and Casualty Company Ltd, China’s insurance giants, are also developing microinsurance products targeting farmers in rural areas. Recently developed products focus on planting, livestock breeding, farmers’ houses, farm machinery, household property, and micro medical insurance.
In 2007, China Life launched a life insurance product targeting farmers for an annual premium of USD 14.25 with coverage of USD 114 in case of fatal accidents. By the end of 2007, 1.2 million farmers were covered with a total insurance income of USD 160 million.
According to the China Insurance Regulatory Commission (CIRC), income from rural property insurance amounted to USD 613 million for the first three quarters of 2007, covering 270 million farmers.
With a presence in mainland China since 1993, Zurich Group was the first non-Chinese insurance provider to obtain a general insurance business license approved by the China Insurance Regulatory Committee (CIRC), setting up a general insurance branch office in Beijing in 2006.
Zurich Financial Services Group (Zurich) is and insurance-based financial services provider with a global network of subsidiaries and offices serving customers in more than 170 countries world-wide. Founded in 1872, the Group is based in Zurich, Switzerland.
In 2007, Zurich established a Global Microinsurance Team and has microinsurance projects in Bolivia, South Africa, and Venezuela. They are currently working with the Consultative Group to Assist the Poor’s joint working group on microinsurance, in an effort to promote basic risk management principles to aid in sustainable development and poverty reduction.
By Melissa Duscha
Additional Resources:
China Economic Net: Moves to Boost Microinsurance
International Finance Corporation (IFC) in China
Microinsurance Center: Global Survey of Microinsurance
Zurich Financial Services Group (Zurich)
Zurich Financial Services Group Business Review 2007
Zurich Launches Microinsurance Research Project in China
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