To celebrate the countdown to Christmas, the Corporate Insurance team will be publishing a prediction for 2014 each day.
Mandatory insurance and catastrophe risks present international players with opportunities
The Chinese insurance market has grown faster than the economy overall and the signs are that this growth will accelerate further across a number of areas. For example, China is currently facing a number of issues around food safety, air pollution, an ageing population, and natural disasters. The government has decided to go down a mandatory insurance route to address them, and pilot schemes on food liability and environment liability insurance have been introduced in various cities.
For example, Shenzhen will be piloting a catastrophe insurance programme with support from the local government to find a suitable catastrophe insurance model for China – a country with high flooding and earthquake risks, only 1.4% of which are currently insured. The opening of the motor third-party liability insurance market in 2012 represents ongoing opportunities, as does any possible opening up by the regulator of other key areas of the market. For example, on the life side, changes around pensions, retirement products, tax incentives and health insurance could allow foreign insurers to leverage their knowledge and expertise.
All of this points to real prospects for growth for international underwriting businesses.