Reinsurance market demand weakened by C-ROSS
Source: Asia Insurance Review | Feb 2019
Demand in China’s reinsurance market is a bit weak overall, one reason being the implementation since September 2017 of the second phase of the China Risk-Oriented Solvency System (C-ROSS) that has increased insurance companies’ underwriting capacity and consequently a significant decline in total demand for reinsurance.
In addition, reinsurance demand is no longer related to the size of the direct insurance business, but is linked to risk. Business has shrunk from lines with large premium incomes. In particular, demand for reinsurance in the motor line is significantly reduced.
These comments were made at a January 2019 conference by SCOR Beijing branch general manager Yu Yidong who outlined the challenges and opportunities faced by the Chinese reinsurance market.
Mr Yu said that the opportunities for reinsurers in China are:
- The belt and road economic outreach initiative where the Chinese insurance sector can alleviate the concerns of Chinese enterprises venturing abroad.
- The transformation of traditional insurance business brought on by internet insurance, as well as new innovative products, lead to market growth.
Excluding Lloyd’s, there are 13 reinsurance companies in China of which six are Chinese reinsurers. A
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