{"id":6072,"date":"2025-06-30T12:00:16","date_gmt":"2025-06-30T12:00:16","guid":{"rendered":"http:\/\/calebdewey.com\/?p=6072"},"modified":"2025-06-30T16:29:42","modified_gmt":"2025-06-30T16:29:42","slug":"chinese-non-life-insurance-sector-shows-resilience-amidst-market-challenges-fitch-ratings","status":"publish","type":"post","link":"http:\/\/calebdewey.com\/index.php\/2025\/06\/30\/chinese-non-life-insurance-sector-shows-resilience-amidst-market-challenges-fitch-ratings\/","title":{"rendered":"Chinese non-life insurance sector shows resilience amidst market challenges: Fitch Ratings"},"content":{"rendered":"

Fitch Ratings, a credit rating agency, reports that China\u2019s non-life insurance sector continues to exhibit strong financial stability, which has supported consistent growth in premiums and improved underwriting outcomes during the first quarter of 2025.<\/p>\n

\"fitch-ratings-logo\"According to Fitch Ratings, despite ongoing challenges related to tariff-driven trade tensions, the sector has benefited significantly from the rising sales of new-energy vehicles, which have helped drive growth in motor insurance premiums so far this year.<\/p>\n

Fitch highlights that the non-life insurance industry maintained a solid solvency position under China\u2019s Risk-Oriented Solvency System (C-ROSS), with the comprehensive solvency ratio standing at 239% at the end of March 2025.<\/p>\n

This level far exceeds the regulatory minimum, reflecting a healthy capital buffer that underpins the sector\u2019s capacity for continued expansion.<\/p>\n

The rating agency notes that underwriting volatility is expected to moderate in certain non-motor insurance lines, such as employer liability and workplace safety liability insurance, due to regulatory measures aimed at aligning rate policies. Fitch points out that these measures seek to control acquisition expenses and discourage excessive competition among insurers.<\/p>\n

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Although persistently low interest rates continue to weigh on investment income\u2014since insurers typically hold shorter-duration fixed-income assets to match their short-tailed liabilities\u2014Fitch observes that most major insurers improved their operational profitability in the first quarter of 2025.<\/p>\n

Fitch forecasts steady premium growth for the non-life insurance sector throughout 2025, driven by government initiatives designed to stimulate consumer spending and provide subsidies supporting domestic consumption.<\/p>\n

These policies have already contributed to an acceleration in motor insurance premium growth in the early months of 2025, even as regulatory controls on premium growth rates remain in place.<\/p>\n

In the same period, the non-motor insurance segment, especially accident and health insurance, expanded more rapidly than motor insurance. Overall, Fitch reports that non-life premiums increased by 5.2% year-on-year by April 2025.<\/p>\n

Fitch further points out that major insurers have preserved stable operating margins by maintaining consistent claims ratios and continuously optimising pricing strategies, operational efficiency, and cost controls. Expense ratios among leading companies have slightly decreased.<\/p>\n

However, smaller insurers continue to face challenges, with combined ratios exceeding 100%, prompting efforts to enhance pricing sophistication and improve operational performance.<\/p>\n

The agency emphasises that regulatory requirements ensuring consistency between statutory filings and actual underwriting practices for motor insurance will continue to support underwriting stability in that sector.<\/p>\n

Regarding investment activities, Fitch states that the sector\u2019s strong solvency margin provides resilience against underwriting fluctuations and supports ongoing growth.<\/p>\n

Given the short-tail nature of many insurance liabilities, the agency expects insurers will remain cautious about significantly increasing equity holdings despite recent regulatory efforts to reduce capital charges on these investments.<\/p>\n

Capital replenishment through new equity issuance or subordinated debt remains necessary for companies with weaker earnings to maintain adequate financial strength.<\/p>\n

Fitch Ratings also draws attention to the substantial economic losses caused by natural catastrophes such as typhoons, floods, and droughts, which surpassed CNY 400 billion in 2024, according to China\u2019s Ministry of Emergency Management.<\/p>\n

The agency expects insurers to continue enhancing catastrophe modelling capabilities, carefully managing exposures, and securing sufficient reinsurance to effectively mitigate such risks.<\/p>\n

The post Chinese non-life insurance sector shows resilience amidst market challenges: Fitch Ratings<\/a> appeared first on ReinsuranceNe.ws<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Fitch Ratings, a credit rating agency, reports that China\u2019s non-life insurance sector continues to exhibit strong financial stability, which has supported consistent growth in premiums and improved underwriting outcomes during the first quarter of 2025. According to Fitch Ratings, despite ongoing challenges related to tariff-driven trade tensions, the sector has benefited significantly from the rising […]<\/p>\n","protected":false},"author":1,"featured_media":6074,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[],"_links":{"self":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts\/6072"}],"collection":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/comments?post=6072"}],"version-history":[{"count":3,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts\/6072\/revisions"}],"predecessor-version":[{"id":6076,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts\/6072\/revisions\/6076"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/media\/6074"}],"wp:attachment":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/media?parent=6072"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/categories?post=6072"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/tags?post=6072"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}