Rising need for health insurance

China Pacific Insurance Co's joint venture with Allianz Group is expected to start operating in the first half of next year as the two partners seek to tap the growing need for health insurance in China, the country's third-biggest insurer said yesterday.

CPIC will invest 1 billion yuan (US$162 million) in CPIC Allianz Health Insurance in the first phase and wants to benefit from Allianz's experience in health insurance, said Gao Guofu, chairman of the Chinese insurer.

Allianz said earlier that it will be a minority partner in the venture, and expected to benefit from CPIC's network and government connections.

Gao also said there will be rising demand for life insurance in China, a view echoed by China International Capital Corp in a report yesterday.

Gao added that the sector can expect strong government support as China aims to nearly double the proportion of insurance premiums in the gross domestic product by 2020.

The China Insurance Regulatory Commission approved the plan to set up the venture in February.

On Sunday, CPIC reported first-half profit in its property and casualty unit dropped 15.3 percent year on year to 1.47 billion yuan, while its life insurance profit jumped 41.9 percent to 4.91 billion yuan.