China’s insurance and reinsurance industry is entering a pivotal decade, with officials and industry executives identifying the acceleration of reinsurance development as a strategic priority for financial reform.
According to Zhuang Qianzhi, party head of China Reinsurance (Group) Corp, the country’s modernization is driving high-quality economic development and generating new, complex risk management needs.
In a report from China Daily, Zhuang said this shift is creating “unprecedented and multi-layered risk management demands across society.”
In the first half of the year, China’s property insurance sector recorded a 4.2% year-on-year increase in premiums, a slightly slower pace than the previous year. Despite this, the industry’s combined cost ratio improved under regulatory oversight, leading to underwriting profits of ¥26 billion (US$3.7 billion), the highest for the period.
For the first time, more than half of property insurers reported underwriting profitability, reflecting a trend toward higher-quality growth. The property reinsurance market also expanded, with ceded premiums surpassing ¥100 billion for the first time in a half-year period.
China Reinsurance has been focusing on product innovation to address climate change and emerging risks such as those related to electric vehicles. This approach has helped the company maintain profit margins even as revenue growth is forecast at 3.4%, which is below the sector average.
The company reported an 18.2% increase in earnings over the past year, surpassing its five-year average annual growth of 16.3%. Looking ahead, China Reinsurance projects annual earnings growth of 5.3% and revenue growth of 6.4%, both trailing Hong Kong market averages.
Industry leaders note that climate change is increasing exposure to catastrophic risks. Risk accumulation is evolving, with new patterns such as industrial clustering and overlapping insured assets.
Elevated reinsurance losses have led most companies to maintain strict underwriting discipline. Zhuang emphasized the need for a resilient and efficient financial risk management system, supported by a modern reinsurance framework.
Zhuang described catastrophes as disasters – natural or man-made – that result in significant economic and social losses, marked by low frequency, high severity, and geographic concentration. He explained that internationally, events with losses exceeding US$25 million are typically classified as catastrophic risk events.
Reinsurance companies, Zhuang said, use their capital, technology, and global reach to disperse and transfer risks, serving as a primary channel for managing catastrophic exposures.
Zhuang’s remarks were delivered at the Shanghai International Reinsurance Conference, which brought together domestic and international reinsurance firms. The event, held in the Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone, focused on the theme “Walking in Tandem, Talking to the Globe.”
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