China to be world largest insurance industry by 2024

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The opening up of China’s insurance sector to foreign insurers is designed to bridge the gap between international insurers and domestic Chinese insurance firms,

Chinese insurance industry’s gross written premium, which stood at $195.65bn in 2020, is forecast to reach $259.97bn in 2024

The figure according to data and analytics company GlobalData, it said China hopes that domestic insurers will be challenged by foreign firms to learn from global best practices.

The projection will make the country the largest global insurance market in the world. This will attract foreign insurers to invest in the country but, despite opening up its economy, domestic insurers are set to benefit from any foreign competition, said GlobalData.

“Reportedly, Allianz Group is now set to become one of the first foreign insurers to run a fully owned operation in China under Allianz (China) Insurance Holding Co. The company has been aggressively pursuing 100 percent ownership of the insurance entity since December 2019, when the Chinese banking and insurance regulator lifted a 51% cap on foreign insurers’ ownership in Chinese operating insurers,” said GlobalData.

Jazmin Chong, insurance analyst at GlobalData, said: “While the abolished rule levels the regulatory playing field for foreign entries, it is important to recognise that the lifting of capped ownership is aimed at benefiting Chinese firms rather than foreign ones. China’s strategy of opening its market to foreign players is part of the country’s wider economic efforts to bridge the gap between international competing firms and China. China is also expecting that foreign insurers will push domestic insurers to learn from global best practices, fostering better corporate governance, risk pricing and investment management.”

She added: “As China continues to foster national champions, foreign insurers that wish to follow in Allianz’s footsteps should take a holistic approach to this market space, challenging Chinese insurers on company best practices rather than diverting efforts and investment to target market shares and gross written premiums, as a benchmark for growth.”

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