CHINA – Chinese insurance market is in its state of transition

According to A.M. Best, after a period of rapid expansion, the Chinese market must now adjust for sustainable and healthy growth.

 

“Since enhancing risk management and market discipline in recent years, China’s regulator has gradually rolled out plans for solvency reform, less restrictive investment rules, the opening of compulsory motor insurance to foreign players and the partial liberalisation of commercial motor rates,” according to Best’s report.

 

These developments are seen as “paving the way for more sophisticated underwriting practices and offsetting market issues brought on by the previous fast expansion. At the same time, regulatory requirements, business growth, competition, and enhancements to operational, underwriting and distribution systems are all driving the continuing demand to increase capital.”