“The Chinese insurance market is in a state of transition: after a period of rapid expansion, the market must now adjust for sustainable and healthy growth,” concludes a special report from A.M. Best.
“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 liberalization of commercial motor rates,” according to Best’s report.
As a result Best sees these developments 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.”
The report also “examines recent developments in both the Chinese life and non-life market, as well provides an overview of the reinsurance sector, as China’s insurance industry seeks to move forward to meet the challenges of the next phase of market growth.”
Source: A.M. Best
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