China Life says quake claims to surpass snowstorms

BEIJING (Reuters) - China's largest life insurer, China Life (2628.HK) (601628.SS), said it expects claims for the Sichuan earthquake to far exceed the claims for freak snowstorms that hit southern China early this year, its president Wan Feng told a news conference on Monday.

The firm, which competes with smaller Ping An Insurance (2318.HK) (601318.SS), has 110,900 policy holders in Wenchuan County, site of the epicentre of the earthquake, Wan said. More than half of those are students.

Wan said compensation for the earthquake would be "a huge test for the whole Chinese insurance industry."

"But China Life won't have a problem because the company has annual premium income of more than 200 billion yuan ($28.6 billion)," Wan added.

China's worst earthquake in three decades killed an estimated 10,000 in southwest China on Monday, and the death toll could climb further as rescuers reach more devastated areas.

China Life has already received claims related to deaths in Shaanxi, Gansu, Yunnan and Chongqing, Wan said.

Wan gave no details about the 110,900 life insurance policies in Wenchuan.

Figures for claims related to the snowstorms in southern China were not immediately available, but the disaster resulted in total direct costs of about 151.65 billion yuan.

"In terms of having more claims than the snowstorm, that's not a very high bar to jump over," said a Hong Kong-based analyst who declined to be identified.

"The snowstorm created a lot of havoc and a lot of loss in a financial sense, but in terms of insured loss for the life companies, the number of fatalities was not that huge."

Analysts said property insurers such as PICC Property and Casualty Co Ltd (2328.HK), China's largest non-life underwriter, would take a bigger hit.

"I would say that the property insurers will bear the larger brunt of the cost here, but that nonetheless the reinsurance programmes they have in place should cushion part of the blow," the analyst said.

($1=6.991 Yuan)

(Reporting by Xie Heng; Additional reporting by Tony Munroe; Writing by Joseph Chaney; Editing by Edmund Klamann)