The Chinese insurance industry was the third largest insurance industry in Asia after Japan and South Korea and the 9th largest in the world by premium volume in 2006, according to the Sigma Report No. 4/2007 published by Swiss Reinsurance Company. It is also one of the fastest growing insurance industries among the world’s major economies.

Between 2000 and 2005, total insurance premiums increased from RMB160.9 billion to RMB492.8 billion (US$64.7 billion), representing a CAGR of 25.1%, according to data published by the CIRC.

Despite its rapid growth and achieving substantial scale in recent years, the Chinese insurance industry, measured by insurance density, or per capita premiums, and insurance penetration, or total premiums as a percentage of GDP, remains under-developed as compared with the insurance industries of more developed economies.

Within China, the development of the insurance industry is uneven across different provinces and municipalities. Like the economy as a whole, the insurance industry is more developed in the eastern and southern coastal areas than in the rest of the country.

According to the Insurance Intermediary Market Development Report 2006 released by the CIRC, in 2006 insurance companies generated approximately RMB447.8 billion (US$58.8 billion) of premiums through insurance intermediaries, which accounted for approximately 79.4% of total premiums generated in the same year.

The Company’s main property and casualty insurance products are automobile insurance. In addition, the Company also offers individual accident insurance, commercial property insurance, and construction insurance products.

The Company distributes both standard automobile insurance policies and supplemental policies, which it refers to as riders. The Company also sells standard third party liability insurance policies, which cover bodily injury and property damage caused by an accident involving an insured vehicle to a person not in the insured vehicle.

The individual accident insurance products the Company distributes generally provide a guaranteed benefit in the event of death or disability of the insured as a result of an accident, or a reimbursement of medical expenses to the insured in connection with an accident, during the coverage period, which usually is one year or a shorter period.

The commercial property insurance products the Company distributes include basic, comprehensive and all risk policies. Basic commercial property insurance policies generally cover damage to the insured property caused by fire, explosion and thunder and lightning. Comprehensive commercial property insurance policies generally cover damage to the insured property caused by fire, explosion and certain natural disasters. All risk commercial property insurance policies cover all causes of damage to the insured property not specifically excluded from the policies.

The individual whole life insurance products the Company distributes provide insurance for the insured person’s entire life in exchange for the periodic payment of fixed premiums over a pre-determined period, generally ranging from five to 20 years, or until the insured reaches a certain age.

The individual term life insurance products the Company distributes provide insurance for the insured for a specified time period or until the attainment of a certain age, in return for the periodic payment of fixed premiums over a pre-determined period, generally ranging from five to 20 years.

Commissions and fees increased 63.7% from RMB53.3 million for the six months ended June 30, 2006 to RMB87.3 million (US$11.5 million) for the six months ended June 30, 2007.

Selling expenses decreased by 20.7% from RMB5.3 million for the six months ended June 30, 2006 to RMB4.2 million (US$0.6 million) for the six months ended June 30, 2007.

Income from operations increased by 146.4% from RMB22.4 million for the six months ended June 30, 2006 to RMB55.2 million (US$7.2 million) for the six months ended June 30, 2007.

Net income increased by 142.8% from RMB24.2 million for the six months ended June 30, 2006 to RMB58.7 million (US$7.7 million) for the six months ended June 30, 2007.