KUALA LUMPUR, Sept 19 (Bernama) -- Global credit rating agency, AM Best has maintained a stable outlook on China’s non-life insurance segment, citing several factors that include a supportive regulatory environment, increased health insurance awareness and strong growth potential in the electric vehicle (EV) insurance market.
Its “Market Segment Outlook: China Non-Life Insurance” report notes that the segment’s solvency ratios under China Risk-Oriented Solvency System (C-ROSS) stabilised in 2023 and through the first half of 2024, following a decline in 2022.
According to AM Best in a statement, large Chinese insurers have been able to raise funds from the domestic debt capital market at favourable financing costs by issuing capital supplementary bonds in recent years.
The credit rating agency views this move as credit-positive and expects that as the capital market expands over time, investor confidence and risk appetite will grow.
“AM Best expects large insurers to maintain their competitive advantage by leveraging more-abundant data, greater bargaining power in distribution networks and advanced actuarial analytics for more-accurate pricing and risk differentiation,” said AM Best senior director, head of analytics, Christie Lee.
Additionally, premium in the health insurance segment has experienced notable growth, supported primarily by high-deductible, high-limit, medical reimbursement policies, often referred to as “million-yuan policies”.
Insurers also have introduced new products with enhanced coverage to meet evolving customer needs, such as tailored protection for subgroups of the population and changes in claims payment structures.
The rapid adoption and strong growth in EV sales have elevated the demand for EV motor insurance. According to the report, many insurers have been cautious in underwriting EV motor insurance due to higher loss frequency and claims costs, but China’s regulator has given insurers greater flexibility to adjust rates based on differentiated customer risk profiles.
This change should encourage insurers to conduct a more-detailed analysis to better assess customer risks.
-- BERNAMA
BERNAMA provides up-to-date authentic and comprehensive news and information which are disseminated via BERNAMA Wires; www.bernama.com; BERNAMA TV on Astro 502, unifi TV 631 and MYTV 121 channels and BERNAMA Radio on FM93.9 (Klang Valley), FM107.5 (Johor Bahru), FM107.9 (Kota Kinabalu) and FM100.9 (Kuching) frequencies.
Follow us on social media :
Facebook : @bernamaofficial, @bernamatv, @bernamaradio
Twitter : @bernama.com, @BernamaTV, @bernamaradio
Instagram : @bernamaofficial, @bernamatvofficial, @bernamaradioofficial
TikTok : @bernamaofficial
