CNinsure's Estimated Profit Targets for 2H 2008 and 2009 Unaffected by CIRC's New Scheme for Tightening Regulation on P&C Insura
September 18 2008 - 12:00PM
PR Newswire (US)
GUANGZHOU, China, Sept. 18 /Xinhua-PRNewswire-FirstCall/ --
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. DATASOURCE: CNinsure Inc. CONTACT:
Phoebe Meng, IR Officer, +86-20-6122-2777, or ; or Oasis Qiu,
+86-20-6122-2777 x850, or
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