Chinese P&C insurers to see stable underwriting profit: report

The overall creditworthiness of Chinese property and casualty (P&C) insurers will remain stable over the next 12-18 months and they will see stable underwriting profit and strong premium growth, Moody’s said in a recent report.

China's P&C insurance premium growth will be in the low-teens over the next one and a half years, driven by stable growth in the economy and policy initiatives that are likely to support strong continued growth in non-motor lines such as agricultural and liability insurance, the report said.

However, the rating agency noted that motor insurance will see slowing premium growth due to subdued car sales and the ongoing price liberalization campaign.

Insurers’ underwriting profit will remain stable as the industry's combined ratio will stay below 100 percent in the coming 12-18 months, according to the report.

The combined ratio is a measure of profitability used by an insurance company to gauge how well it is performing in its daily operations.

Moody’s said that compared with many other markets, Chinese P&C insurers are more agile in embracing technology to meet the needs of a growing number of tech-savvy customers. Technology adoption is most prominent in marketing and distribution, but is also finding growing application in underwriting and product research.

Insurers have increased partnerships with their digital service affiliates and technology companies. These partnerships will remain a key driver of technology adoption in the predicted period and beyond.