HONG KONG, Dec 13 (Bernama-BUSINESS WIRE) — AM Best has revised its market segment outlook on the China non-life insurance industry to stable from negative due to the segment’s improved underwriting performance and better growth prospects as China eases its zero-tolerance COVID-19 policy.
The Best’s Market Segment Report, “Market Segment Outlook: China Non-Life Insurance,” states that non-life companies’ net profit increased by 20% year over year as of the third quarter of 2022 (2022Q3). As the non-life segment in aggregate has a relatively high net premium leverage (a measure of net premium written to capital level), the improvement in underwriting performance was magnified in the overall net profit, which was more than sufficient to offset the recent less favourable investment returns. AM Best notes that the improvements in the segment’s underwriting performance were attributed to benign catastrophe activity for the year to date, and a slowdown in economic activity given COVID-19 lockdowns, and therefore, a lower accident rate. Most importantly, with the negative impact of the 2019 motor comprehensive reform and financing-type credit insurance fully reflected in recent years’ performance, AM Best notes that this allows the non-life segment to begin 2023 anew in terms of underwriting performance.