With the goal of growing their premiums, both Munich Re and Swiss Re Ltd. have announced that they are headed into China to assist local auto insurance companies in the writing of a greater amount of coverage within the largest auto market on the planet.
The world’s second largest reinsurer, Swiss Re, has already stated that the premiums in China for the first two quarters have exceeded $1 billion, which is significantly higher than the $885 million that was seen by the same time last year.
According to the Munich Re chief executive officer for Greater China and Southeast Asia, Tobias Farny, their income from Chinese premiums is forecasted to increase to $1.6 billion, which is a 70 percent boost on the demand for motor insurance this year over last year.
Munich Re also maintained that reinsurance will be able to minimize the amount of necessary capital required by primary insurers in China in order to meet the ever-growing demand for auto coverage, after last year’s sales had already spiked by 32 percent.
Stefan Lippe, the chief executive officer for Swiss Re has similarly announced that they anticipate that within the next decade, China will take the U.K.’s current position as the second largest market for the insurer.
A Collins Stewart Hawkpoint Plc analyst, Ben Cohen, from London, explained that reinsurers have many new opportunities in China, and that “Large groups such as Munich Re and Swiss Re are able to provide capital in the sizable amounts needed by China’s large insurance groups.”