Chinese insurers' growth momentum set to boost in 2023

Written by Adam Cadle

16/05/2023

China’s reopening, the gradual recovery of its economy and better consumer sentiment will boost insurers’ growth momentum in 2023, Fitch Ratings has said.

The life and non-life insurance sectors’ premiums rose 8.9% and 10.4% yoy, respectively, in Q1 2023.

"We expect many insurers to remain cautious on investment risk-taking in consideration of unstable global capital markets," Fitch Ratings said.

"Smaller and weaker life and non-life insurers are likely to seek additional capital to support their solvency positions under the China Risk-Oriented Solvency System phase 2 regime after organic growth in capital weakened in 2022. The life sector’s comprehensive solvency ratio fell to 186% by end-Q4 2022 while the non-life sector’s remained strong at 238%, although both were well above the regulatory minimum of 100%.

"We do not expect the implementation of the IFRS 17 accounting standard, which listed Chinese insurers are required to adopt from 2023, to significantly alter major non-life insurers’ financial results. However, life insurers that have aggressive sales strategies focusing on less or unprofitable single-pay bancassurance policies may report lower profit."

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