China's insurance industry is expected to continue its growth, with new rules on short-term life products and growth in non-motor property insurance aiding the market momentum, says A.M. Best Senior Financial Analyst Vivian Cheung in a report.
She said: “In 2016, the main factor driving growth in the China insurance sector was growth in the life insurance sector, which grew by a remarkable 36% year over year.
“Growth was mainly driven by relaxation by the Chinese regulator of guaranteed investment returns so that life insurers could offer more short-term products with investment returns that were more attractive than those offered by the banks. For the non-life insurance sector, the growth was mainly coming from the non-motor segment, particularly the credit and liability sectors.”
Ms Cheung said that although market growth continued in 2017, the pace of growth slowed. “This was due to a slowdown in the growth rate in the life insurance sector, as the regulator raised a lot of concerns over excessive growth in the universal life product line. The regulator has tried to promote more long-term saving products and protection-type products.”
Looking ahead, she said that the Chinese insurance market will continue to grow given the low penetration rate and the huge population.
She said: “In the life sector, long-term and protection products will continue to be the growth focus. However, these types of products will need to be underpinned by good quality investments with longer duration.” She added that in the P&C sector, the non-motor segment will continue to be the growth driver.
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