There have been many changes to the Chinese insurance marketplace over the last few months, with the introduction of foreign insurers as well as the recent increases in the premiums for property and casualty insurance.
Aon Benfield has just announced that those premiums had risen to $6.5 billion in 2011, which was a 67 percent increase over those in 2005. Furthermore, it has been forecasted that this growth will continue to rise as the China Insurance Regulatory Commission places its focus on premium increases and policies that will form a risk transfer program for natural disasters.
That country makes up approximately 4 percent of the total insurance premiums of the entire world, at $226 billion for non-life and life insurance. Aon Benfield stated that over the last ten years, this portion of the global market has grown by a full percentage.
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Moody’s has also indicated that foreign insurance companies are struggling to make their way into the Chinese insurance marketplace, regardless of new regulations that have officially opened the doors to them.
The Moody’s report was entitled “Foreign Insurer Strategy in China: Advance or Retreat?” and showed that as of September 2011, there are 45 foreign-based insurance companies in the country, when compared to 2004’s figures, which showed 13 foreign-based insurers.
The author of the report, Sally Yim, a senior credit officer and vice president at Moody’s, does indicate, though, that while there has been a great deal of growth in the Chinese insurance marketplace, foreign-based insurance companies are automatically placed in a weaker position than the domestic firms.