Monday, July 24, 2017

China’s tightening to benefit insurers in long run

Analysts are confident that the Chinese insurance regulator’s tighter regulations will ultimately benefit insurers in the long run.

S&P Global Ratings credit analyst Eunice Tan said that the tightened measures could result in improved market discipline among insurers.

She said insurance companies will resume their focus on underwriting and cut back on speculative investments while being more prudent in managing their regulatory solvency position.

Leon Qi, a senior analyst at Daiwa Capital Markets in Hong Kong, stated in a research note that intensified regulatory scrutiny of the sales of life insurance products and investment behaviour will help curb overly aggressive pricing competition in the sector.

The China Insurance Regulatory Commission has been issuing warnings and guidelines since early April, stressing risk control requirements for insurers of all sizes.

 

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