AM BEST KEEPS CHINA NON-LIFE INSURANCE OUTLOOK STABLE

KUALA LUMPUR, Oct 31 (Bernama) -- AM Best has maintained a stable outlook on China’s non-life insurance segment, supported by sustained premium growth driven by new energy vehicles (NEVs), health reforms and emerging product developments, alongside supportive regulatory policies and market development initiatives.

In its latest report titled “Market Segment Outlook: China Non-Life Insurance”, the global credit rating agency noted that concerns about China’s economic momentum have emerged amid slower gross domestic product (GDP) growth forecasts through 2030, weaker credit and export growth, and a prolonged property sector downturn.

Despite these headwinds, the non-life insurance segment has shown resilience, though it has recorded a moderate slowdown in direct premiums written growth in recent years.

Growth in non-motor lines has generally outpaced the motor segment as insurers diversify portfolios, but the gap is narrowing as higher NEV sales boost motor insurance demand.

AM Best senior financial analyst, Lucie Huang in a statement said the higher loss frequency is linked to driver inexperience, while greater loss severity stems from higher repair and replacement costs, contributing to overall insurance losses in 2024.

Meanwhile, its director of analytics, James Chan said: “Over the long term, non-life insurers with refined business-line management and a strong focus on efficiency are more likely to sustain their market position.”

The report also noted that non-life insurers are also expanding into emerging sectors such as green energy, the low-altitude economy—including drone-related coverage—and high-tech manufacturing. Growing sustainability efforts have further spurred demand for liability products such as safety production and environmental pollution insurance.

China’s rapid adoption of digitalisation, automation and domestically developed artificial intelligence tools has enhanced operations across client servicing, underwriting, claims handling, fraud detection and back-office functions. These technologies have improved efficiency but also introduce new operational and cyber risks.

-- BERNAMA