Regulator Invites Foreign Firms to Further Tap Into Insurance Market
(Beijing) — China’s insurance regulator pledged to further open the 3 trillion yuan market to foreign capital and encouraged overseas players to tap into the local health, disaster and pension insurance businesses.
The China Insurance Regulatory Commission (CIRC), the country’s top insurance regulator, will continue improving the regulatory environment while further widening market access for foreign-funded insurers in the country, said Chen Wenhui, vice chairman of the CIRC at a Tuesday industry meeting.
Chen, who is running the commission following former Chairman Xiang Junbo’s dismissal on corruption allegations in April, said foreign insurers will be encouraged to enter China’s health, pension and disaster insurance markets to help explore new business models and push forward industry reforms.
It is unclear whether the commission will revise any rules regarding foreign investments in the industry. Under existing regulations, a foreign-fund insurance company can be set up in China when its foreign parent has engaged in the insurance business for more than 30 years and has maintained a representative office in China for more than two years. The parent company should also have no less than $5 billion in total assets.
Official data showed that currently 57 foreign-fund insurance companies have been operating in China, running more than 1,800 branches and offices across the country.
But foreign insurance players’ engagement in China has remained small, Chen said. As of July 31, total assets of these companies reached 1 trillion yuan ($153 billion), or 6% of the industry’s total assets. Foreign insurers represented 5% of China’s insurance market, official data showed.
China’s insurance industry, one of the most liberalized segments of the country’s financial market, has experienced rapid growth in recent years. Total premium income in 2016 rose 27.5% from a year earlier to 3.1 trillion yuan, the fastest growth since 2008. The industry reported total assets of 15.1 trillion yuan at the end of 2016, up 22.3% from the start of the year, according to CIRC.
But risks have also emerged as insurers increasingly invested in risky, short-term assets seeking quick gains. This pushed up market leverage while putting policyholders at risk. As a result, regulators imposed tighter rules this year on investments to force insurance companies back to basics.
Amid the tougher regulation, insurers in China reported that premium income rose 21% year-on-year in the January-July period, compared with a 35% jump in the same period last year.
But Chen said at the meeting that China’s insurance industry is still in a golden era of growth and will remain open to the outside world. He emphasized that insurers should stick to their fundamental mission of being long-term, prudent investors.
Contact reporter Han Wei (email@example.com)
Jan 17 15:37
Jan 17 15:25
Jan 17 14:02
Jan 17 10:20
Jan 17 06:03
Jan 16 18:05
Jan 16 13:42
Jan 16 13:11
Jan 16 04:27
Jan 15 16:53
Jan 15 15:05
Jan 15 13:28
- 1In Depth: The Aftermath of the Killing of Qasem Soleimani
- 2Cash-Stuffed Secret Vault Appears in CCTV Documentary
- 3In Depth: China’s New Asset Management Rules Face Uncertainty
- 4Corrupt Chinese Official Pours Moutai Down the Drain
- 5First Death From New SARS-like Virus Reported in Central China’s Wuhan
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas