Compulsory motor insurance has sustained large losses

China's compulsory motor insurance has posted a cumulative technical loss for the entire market worth 8.3 billion CNY (1.3 billion USD) in 2012, compared to 11.2 billion CNY (1.7 billion USD) in 2011 and 9.7 billion CNY (1.4 billion USD) in 2010. This class of business has nevertheless achieved a financial profit of 2.9 billion CNY (460 million USD), reducing thus the net operating income to -5.4 billion CNY (-857 million USD).

Of the 42 insurers engaged in compulsory motor insurance only 10 managed to release a technical profit. Between July 2006, when compulsory motor insurance was first introduced on the market, and late 2012, the market has collected a premiums volume of 491.51 billion CNY (78 billion USD) and produced a cumulative loss of 25.6 billion CNY (4 billion USD).

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