2006 Interim Report－A Share.pdf - 中国银行

Management Discussion & Analysis
underwriting amount. In the same period, it claimed second place among Chinese
securities companies in terms of volume of bond delivery.
Insurance Business
The Bank offers insurance services including life insurance and non-life
insurance. Non-life insurance business is wholly owned and operated by the
Bank, and life insurance business is owned and operated jointly with the Bank's
subsidiary BOC Hong Kong.
Bank of China Group Insurance Company, Ltd ("BOCG Insurance") and BOC
Group Life Assurance Company, Ltd. ("BOCG Life") are responsible for the
operation of the Group's insurance business.
In the first half of 2006, the insurance business of the Group achieved gross
premium income of HKD648 million, translating into RMB388 million in total
profit, up189% year-on-year. Main resources of insurance businesses include
banking agency business and broker agency business.
In 2006, BOCG Insurance penetrated into more specialized liability insurance market,
including directors liability insurance and professional liability insurance. At the same
time, following the "User-Pay" principle advocated by the government in the medical
system reforms, the Bank launched a series of tailored medical insurance programs. To
expand overseas business, BOCG Insurance acquired a 32% stake in Luen Fung Hang
Insurance Co., Ltd in the first half of 2006 in a move to penetrate into the life insurance
market of Macau. In order to further consolidate the interaction of commercial
banking, investment banking and insurance business, BOCG Insurance disposed of 51%
of its equity interests in BOCG life to BOC Hong Kong (holding) Limited, thus opened a
new chapter for the development of life insurance business of BOCG Life.
Information Technology
The Bank realizes that IT construction is crucial to its future development. In the
first half of 2006, the Bank continued to direct IT efforts with supporting business
development and ensuring secure operation as priority. Progress was achieved for
significant IT projects including construction of the management information system,
new online banking platform, and centralized international settlement and trade
finance system. Meanwhile, the infrastructure construction of a new information
center and a disaster recovery center has been initiated. The Bank is also systematically
implementing the IT Blueprint; fundamental tasks including system training, gap
analysis and stress testing have been launched. Effective implementation of IT Blueprint
is critical to the Bank's reform, development and innovation. It will help the Bank realize
centralized processing of operational information of its branches to intensify internal
control, risk prevention and timely supervision by the internal audit, and formulate
a customer-centered management model based on business lines, thereby creating a
powerful IT platform for sharpening the Bank's competitive edge.
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