Winner-takes-all situation developing in non-life market
Source: Asia Insurance Review | Jan 2020
Non-life insurers face huge challenges in the motor insurance market as further price liberalisation has reduced average policy premium, while new automobile sales are experiencing negative growth for the first time. Both of these developments challenge insurers, notes international professional services firm EY in its China Insurance Outlook 2020 report.
Motor-price liberalisation further challenges non-life insurers’ capabilities to compete in a market shifting toward customer-centricity and away from traditional commission-driven approaches. In this new environment, quality service and products are key differentiators.
Primarily due to the market being highly concentrated in the motor business, which has resulted in extremely fierce competition, China’s top three non-life insurers – People’s Insurance (PICC), Ping An and China Pacific – captured 104% of the non-life market’s underwriting profit in 2018. Outside of these companies, China’s non-life industry has realised underwriting losses. A
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