A SLUGGISH stock market has contributed to a drop in business for overseas life insurers in Shanghai in the first half.

Overseas life insurers took 17.13 percent of market share in Shanghai, down 8.8 percent from a year ago, said the Shanghai bureau of China's Banking Regulatory Commission yesterday.

Premiums at overseas life insurers grew at a stagnant 3.56 percent to 4.58 billion yuan (US$668.4 million) in the first half while total life premiums in Shanghai rose 56.74 percent to 26.73 billion yuan.

The lackluster premium growth is attributed to shrinking unit-linked business, the regulator said.

Overseas banks managed to sell a lot of share-related products in the same period a year ago, when China's stock market was soaring.

However, the capital market slumped in the first half, knocking the shine of life insurers' products.

According to the regulator, one unnamed overseas life insurer suffered a year-on-year premium drop of 88 percent.

Property and casualty premiums gained 11.45 percent to 7.66 billion yuan. Car premiums accounted for 50.28 percent of this segment of the market, 20 percent lower than the national average.

Total premiums collected in Shanghai topped 34.39 billion yuan in the first half of this year, up 43.74 percent from a year ago.

Shanghai sales accounted for 6.12 percent of the Chinese mainland's total market, within the top three cities.

Compensation payouts rose in the first half due to the snowstorm and earthquake that hit Sichuan on May 12.

Claims for snowstorm-related damages topped 920 million yuan by May 31, with 490 million yuan already paid to policy holders. Six insurers in Shanghai are involved in the earthquake claims, with claims for estimated losses of 57 million yuan.