China to set up first insurance firm for farmers

China will set up its first insurance firm to serve hard-pressed farmers in the latest step to boost the lagging rural sector.

China will set up its first insurance firm to serve hard-pressed farmers in the latest step to boost the lagging rural sector, state media said on Tuesday.

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The Shanghai Anxin Agricultural Insurance Co had won approval from the China Insurance Regulatory Commission to set up shop, the China Daily said.

The joint-stock company, with a registered capital of 200 million yuan ($24 million), would be the nation's first new insurance firm in seven years, the newspaper said.

The insurance company would provide state-subsidised coverage for planting and breeding and commercial policies on property, health and accidents, state media said.

Farmers now enjoy little insurance protection as big state insurers have retreated from the loss-making farm insurance business in recent years.

Agricultural insurance premiums were a meagre 460 million yuan last year, making up for just 0.5 per cent of the overall property insurance premiums, the China Daily said.

"Agricultural insurance is not just about agriculture because the stability of agriculture is of critical importance to social stability," it quoted Wang Xujin, an insurance expert at Beijing Technology and Business University, as saying.

China's leaders have pledged to step up economic support for rural areas this year to supplement the flagging incomes of hundreds of millions of farmers it fears could compromise stability and impressive economic growth.

Shanghai Anxin would pave the way for a wider rural insurance system, the China Securities Journal said.