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China's insurance companies are facing increasing cost pressures, as bank fees rise across the country. Insurers are asking banks to think of consumers, before making price adjustments.
Insurance companies are paying more for transactions through POS machines.
In east China's Anhui Province, the fee has risen from 0.1 percent to 0.3 percent per transaction.
Yan Wenjing, Finance Principal of Alltrust Insurance said "Previously, our cost was around 120-thousand yuan. But now it has tripled to 360-thousand yuan."
Liu Chao, Employee of Tianan Insurance said "Our cost will increase by around 800-thousand yuan this year if our premium revenues maintain the same growth rate as last year."
So exactly how much more will insurers have to pay?
Take car insurance for example, insurance companies in Anhui Province saw a total of around 6.8 billion yuan worth of premiums in 2009. More than 80 percent of the payments were through POS machines. And the figure is expected to increase around 35 percent this year. The increased fees mean insurers will have to pay nearly 15 million yuan more on costs.
Many consumers are worried that insurance companies will transfer the rising costs to them. Insurers are easing the concerns.
Liu Chao said "Currently, we won't take such action. But we do hope banks can take the interests of consumers and insurance companies into consideration before adjustments."
The insurance industry association in the province says it will consider looking for a third party payment option, to help insurers offset their increasing costs.