GUANGZHOU, China, Sept. 19 /Xinhua-PRNewswire/ -- CNinsure Inc., (Nasdaq: CISG) today announced that its commissions and fees revenues from P&C insurance business is expected to decline slightly due to the implementation of a new Working Scheme on Further Regulating the P&C Insurance Market ("Working Scheme") issued by China Insurance Regulatory Commission (CIRC). But CNinsure anticipates its profit targets for the third quarter and fourth quarter of 2008 and for 2009 won’t be affected.
The Working Scheme was issued by CIRC on August 29th, 2008 for the purpose of tightening regulation on the P&C insurance market, enhancing risk control, protecting consumers’ rights and interests and forging a fair, regulated and orderly market. The scheme came into effect on 1 September, 2008.
"The tightening of regulation on the P&C insurance market is helpful for the further consolidation of the fragmented market, which provides substantial opportunities for leading players like CNinsure to continuously expand its market presence through acquisitions," Mr. Yinan Hu, CNinsure’s Chairman and Chief Executive Officer, stated, "As a result of this new working scheme, we anticipate that commissions as a percentage of premiums paid by P&C insurance companies to intermediaries will decrease. This may result in a decline in our commissions and fees revenues from P&C insurance business. However, since we will also pay less to our agents, we believe the overall impact of this new regulation on the gross margin of our P&C business will be limited"
He added: "On the other hand, we achieved rapid growth in life insurance and claim adjusting business in the first half of 2008, which surpassed our estimate. Therefore, we believe that we won’t be affected by this new scheme in achieving our estimated profit targets for the third and fourth quarter of 2008 and 2009."
About CNinsure Inc.
CNinsure is a leading independent insurance agency and brokerage company operating in China. CNinsure’s distribution network reaches many of China’s most economically developed regions and affluent cities. The Company distributes a wide variety of property and casualty and life insurance products underwritten by domestic and foreign insurance companies operating in China, and provides insurance claims adjusting as well as other insurance-related services.
Forward-looking Statements
This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward- looking statements by terminology such as "will," "expects," "believes," "anticipates," "intends," "estimates" and similar statements. Among other things, the management’s quotations contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about CNinsure and the industry. Potential risks and uncertainties include, but are not limited to, those relating to CNinsure’s limited operating history, especially its limited experience in selling life insurance products, its ability to attract and retain productive agents, especially entrepreneurial agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in Chinese insurance industry, and its ability to compete effectively against its competitors. All information provided in this press release is as of September 18, 2008, and CNinsure undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although CNinsure believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by CNinsure is included in CNinsure’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.
