After insurance enters China for more than a century, Shanghai
Anxin Agricultural Insurance Co. Ltd. (SAAIC), the first of its
kind specially providing service for farmers, was established in
the east China's metropolis Friday.
With a registered capital of 208 million yuan (US$25 million), the
SAAIC focuses its business scope on planting and breeding
industries, said Zhou Guowei, deputy manager-general of
SAAIC.
More than 200,000 poultry farmers in Shanghai became the first
group of beneficiaries as the Municipal Animal Husbandry Office
bought insurance for their some 150 million poultry.
"I never expect this happen to me one day -- my chickens were
insured and the government paid for this. I will no longer be
afraid of the bird flu," said Zhou Xueming, taking over the
insurance policy form from the officers with the municipal animal
husbandry office.
According to the insurance contract, this 60-year-old farmer will
enjoy a compensation, which accounts for 30 percent of his loss in
any accidental disaster.
Statistics from the Ministry of the Civil Affairs shows natural
disasters brings China an annual economic loss above 100 billion
yuan (US$12 billion), with more than 200 million people
affected.
Some 900 million farmers of this world's most populated country,
who rely more on the nature, are usually the major victims of the
catastrophes.
China has resumed agricultural insurance since 1982. Insurance
companies enjoy a governmental subsidy for the insurance premium
when providing insurance for planting and breeding
industry.
Even though, however, few insurance companies have set foot in the
business in these fields because of high risk and little
profit.
Statistics from the China Insurance Regulatory Commission (CIRC)
showed that in 2003, the income from agricultural insurance in
China was 460 million yuan (US$55 million), only accounting for 0.5
percent of the country's total premium from property
insurance.
At the same time, most of the farmers are able to afford the
expense for a regular property insurance and have to wait for the
limited relief found from the government after a natural
disaster.
"As an active experiment to resolve all these problems, the
establishment of SAAIC is a milestone in the development of China'
s insurance industry," said Zhou Yanli, chairman-assistant of the
CIRC.
Local government will buy a "basic insurance" for farmers. For
example, in Shanghai, once a disaster happens, all the farmers
engaged in rice-growing, pig or cow farming and freshwater
aquiculture will be compensated with 35 percent of their loss and
for those planting wheat, vegetables, trees and breeding poultry,
the amends is 30 percent, said Zhou Yanli.
"Besides, if the farmers buy a supplementary property insurance
themselves, they will get a full compensation for their loss," he
said.
The SAAIC also provide farmers with agriculture-related property
insurance, short-term personal accident insurance and health
insurance.
"Through selling these insurance with higher profit, we are able to
deal with the possible loss caused by the major business," said
Zhou Weiguo.
Besides the SAAIC, the CIRC has also approved the establishment of
another agricultural issuance company in northeastern Jilin
Province, a major crop production base in China and more pilot
projects have been launched in provinces and autonomous regions of
Sichuan, Heilongjiang, Zhejiang, Xinjiang and Inner Mongolia, said
Zhou Yanli.
(Xinhua News Agency September 18, 2004)