The Chinese Government has decided to open its compulsory third-party motor liability market to foreign-invested insurance companies, Chinese vice president Xi Jinping has revealed.
Jinping has released a 20-point fact-sheet statement on strengthening US-China economic relations following meeting with US counterpart Joe Biden in Washington, US.
The decision to open the market, however, has raised wide speculation that the Chinese regulators will loosen controls on premium rates for third-party motor with the entry of overseas companies.
The change will benefit both foreign and domestic insurers. Foreign insurance sellers will gain a greater market share in China while the local insurers’ will have an opportunity to improve their products and services.
According to a recent survey by PricewaterhouseCoopers International, foreign insurers’ market share in China has not changed in recent years with life insurers holding 5% of the market and property and casualty insurers about 1%.
Motor forms the biggest part of Chinese non-life insurance market producing total premiums of Rmb300bn in 2010, which is almost 75% of all non-life premiums, according to the China Insurance Regulatory Commission.