China: General insurers to show weak underwriting results this year
Source: Asia Insurance Review | Jun 2021
Chinese non-life insurers’ overall underwriting margin will remain weak in 2021 despite the recovery of economic activity, says Fitch Ratings.
Non-life insurers suffered a decline in both motor premium volume and underwriting margin after the implementation of the comprehensive reform of motor insurance in September 2020. The loss ratio of the motor insurance segment increased by 14% to 71% for the six months after the launch of the reform, to March 2021, according to statistics from the China Banking and Insurance Regulatory Commission.
However, a reduction in the expense ratio due to lower commissions and administrative costs could alleviate the escalation in motor incurred claims.
Insurers continue to shift the product focus to non-motor insurance policies, and Fitch believes earnings stability relies to a great extent on their capability to manage the underwriting risks associated with exposure to the non-motor business. A