On 17 September, the 2020 China P&C reinsurance market seminar was held in Xi’ an. According to the analysis of China Re P&C, a subsidiary of China Re Group, on China’s P&C insurance market in the first half of 2020, although the growth of premiums in China’s P&C insurance market slowed down due to the outbreak of COVID-19 pandemic, the industry’s insurance product mix continued to adjust. The industry is expected to enter a new era of high-quality development. As the demand for reinsurance ceded by P&C reinsurers increased, the growth of premiums ceded to reinsurers far exceeded the market level for the same period. The reinsurance market revealed a hard trend.
In the first half of the year, China’s P&C insurance market premiums increased by 7.6% year-on-year, among which the performance was significantly affected in February due to the COVID-19 pandemic, but growth resumed month by month since March given the overall recovery of the market, showing strong resilience in the overall P&C insurance market. In terms of insurance product mix, the proportion of non-motor insurance continued to increase, and the proportion of accident and health insurance to non-motor insurance exceeded 30%. In terms of profit sources, due to the sharp decline in vehicle travel in the first half of the year as a result of the implementation of COVID-19 pandemic prevention and control, the underwriting profits of motor insurance business increased as compared with the same period of last year. The non-motor insurance business was generally loss-making as a result of credit guarantee insurance.
Analysts of China Re P&C are of the view that the new development pattern with domestic large-scale circulation as the main body and mutual promotion between the domestic circulation and international circulation will be conductive to promoting the high-quality economic development. Focusing on the P&C insurance industry, regulatory authorities have frequently expressed concerns with an emphasis on going back to basics of insurance industry as a source of protection and requiring insurance to effectively serve the real economy, while continuously promoting the high-level opening-up of the industry. In the future, the primary P&C insurance market will enter a new era of high-quality development. In the reinsurance market, affected by uncertainties such as the COVID-19 pandemic in the international market and the catastrophe loss, the decline in the rating of offshore reinsurers and the deterioration of the fundamentals of the credit insurance business, the global reinsurance market showed a hard trend.
The COVID-19 outbreak has a significant impact on the global insurance industry. Although the domestic P&C insurance industry maintained steady growth in the first half of the year, the industry is concerned about how to achieve high-quality development in the post-pandemic era. China Re P&C believes that in the post-pandemic era, the P&C insurance industry will vigorously trigger emerging risk protection needs such as health protection, network risk and business interruption, and accelerate the incubation of emerging insurance products for individual clients, corporate clients and government clients. In addition to the traditional agency channel, all P&C insurers should focus on developing emerging channels such as government cooperation, Internet + and industry organizations. Looking ahead, the overall P&C insurance industry should focus on the reform trends such as online business process, digital business information, and intelligent service and management.
At the seminar, Wang Yuxiang, vice president of Insurance Association of China, said that China’s insurance industry was faced with both opportunities and challenges amid the unprecedented, rapid changes in a century and the pandemic around the world. Risk factors in various areas continued to emerge, and the uncertainty of instability increased significantly, resulting in greater demand and higher requirements for risk management. In this regard, China Re P&C stressed that weather anomalies increased the catastrophe loss and major accidents in special risk areas occurred frequently. Major risk events in the area of credit guarantee remained at peak. Market players were desperate to make up for the risk shortcomings.
At the seminar, He Chunlei, vice chairman and president of China Re Group, stated that China Re Group, as a state-owned enterprise and dominant player in China’s reinsurance industry, closely focused on the “One-Three-Five” Strategy, devoted all efforts to “platform operation, technology advancement and globalization”, and insisted on fighting the pandemic and managing the business simultaneously and promoting orderly resumption of work and production, so as to contribute to the epidemic prevention and control, respond to new opportunities and challenges in the industry, and build a new ecosystem in the industry as a reinsurer.
Zhang Renjiang, general manager of China Re P&C, said that moving forward, faced with the industry landscape where opportunities and challenges co-exist, China Re P&C will focus on risk management and work together in building an open, sharing, innovation-driven and win-win industry ecosystem with innovation, professionalism and responsibility.