SCIO press conference on promoting virtuous cycle of finance and economy amid high-quality development
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E-mail China.org.cn, March 8, 2022
Xinhua News Agency:
Just now, Mr. Guo mentioned the need to regulate the third pillar endowment insurance development. You have repeatedly stressed that the insurance industry should stick to its nature of being a means of protection from financial losses. What will the CBIRC do to maintain insurance as a means of protection and bring it into play in the national social security system and pension financial services? Thank you.
Guo Shuqing:
There are two colleagues from insurance companies. I think they can give you a more detailed answer. Let me say something briefly.
China's financial industry grew very fast. We had only about 4 trillion yuan in financial assets in 1990. The figure has exceeded 370 trillion, and bancassurance accounts for the majority. Especially over the last 30 years, the industry has developed very fast at a fantastic speed. Despite some problems, we have not had a full-blown financial crisis, thanks to the system of socialism with Chinese characteristics, the strong leadership of the Communist Party of China, and the China program and the Chinese system in the financial sector. When it comes to endowment insurance, commercial old-age insurance, medical insurance, and health insurance develop very fast. Compared with European and American countries, however, the development of our insurance and banking sector still lags behind. Our total banking assets rank first in the world, surpassing Europe and the United States, and our insurance volume ranks second in the world. However, the depth and density of our insurance are below the world average level, especially the level of developed countries. We have worked hard to develop endowment insurance. You mentioned the three pillars of endowment insurance: basic old-age insurance, corporate annuities as supplementary insurance, and commercial old-age insurance as the third pillar insurance.
In comparison, the third pillar of insurance lags behind the other two pillars and calls for a boost. Since last year, we have taken some measures and made headway, but we can't be too hasty because we have to guard against risks. In this regard, we proceed with the policy laid down by the financial commission of the State Council -- "Jogging with short steps and making gradual progress." Mr. Bai Tao, take the floor, please.
Bai Tao:
Thank you, Mr. Guo. Thank you for your questions. Social security concerns thousands of households, the interests and the well-being of every people, and the long-term stability of our country. The insurance industry can function as a "shock absorber" for the economy and a "stabilizer" for society. We have always stuck to the nature of insurance to protect from financial loss, which is an essential requirement set forth by the CPC Central Committee and the State Council. We have participated in developing the social security system in a comprehensive and multilevel way and tried to build an excellent social security net for the better lives of the people.
The life insurer owned by China Life Insurance (Group) Company is a triple-listed company, and its life insurance products and services cover the whole life cycle of people, including medical support, healthcare, elderly care, education, accidents, and so on. The property insurer's support services against risks cover urban and rural regions, companies and individuals, as well as all fields such as property safety and accident prevention. Our life and property insurance have provided nearly 540 trillion yuan of protection against risks for the whole society, offering services for over 800 million clients. We have given full play to the company's advantages, such as its specialized services, widespread networks, technological capacity, and professional personnel. One of the most important strengths of the company is its huge sales network, and we have made full use of the advantages in these aspects and provided efficient services for social security. For example, in terms of critical illness insurance, we have carried out more than 210 projects and offered services for some 350 million urban and rural residents. We also established "one-stop" connections with over 30,000 hospitals so as to gradually resolve the difficulty of payment settlement for medical treatment incurred outside the provincial-level administrative area where the patient's medical insurance is registered. In addition, for supplementary medical insurance, we have offered services for over 91 million clients so far.
Regarding the "third pillar" of China's pension system you just said, Mr. Guo also mentioned that there is a relatively big gap on this issue between China and Western countries. I'll add more information in this regard. In terms of the development of the "first pillar," we have given full play to our role as China's biggest pension insurance company and provided nearly 30 billion yuan of services to social security funds. In terms of the "second pillar," China Life has made full use of its function as a professional pension insurance company, providing management services for occupational pension in 32 coordination regions and providing services for nearly 30,000 companies for company annuity. Currently, the total amount of company annuity and occupational pension that are managed by us amounted to 1.2 trillion yuan, and we have been working to maintain and increase the value of pension funds for clients. As for the "third pillar," we proactively rolled out long-term care insurance for over 23 million people. I'll add another piece of information. Our life insurer has undertaken over 52 million pieces of insurance business that are associated with elderly care, and the total amount of reserve has reached 1.7 trillion yuan, which can provide fund reserve for pensions of our clients.
In addition, another aspect that draws wide attention is our contribution to the improvement of the health support system. We have fully leveraged insurance funds’ character of the long cyclical period, set up a "Grand Pension Fund," and invested in a group of elderly care institutions in South, North, East, and Southwest China. Currently, these institutions started to operate and provide multi-layered elderly care services in retirement homes, communities as well as the homes of the elderly themselves. Besides, based on the need of the health management, we established a "Grand Health Fund" and invested in over 40 companies. We have integrated service resources concerning health care, medicines, and those in hospitals, and provided health management services for our clients.
In conclusion, China Life will continue carrying out the decisions and deployments being made by the CPC Central Committee and the State Council, comprehensively strengthen capacity building, and further give full play to the role of insurance as a "shock absorber" for the national economy and a "stabilizer" for society. We will also make all efforts to develop a social security system that ensures people's basic needs and is inclusive and diversified so as to make the CPC Central Committee be assured and people satisfied. Thank you.
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