Press Releases
CISFC Holds the 18th Meeting of the Risk Assessment Expert Committee for Insurance Industry


April 30, 2019


The 18th meeting of the Risk Assessment Expert Committee for Insurance Industry hosted by CISFC was held in Beijing on April 24 and 25, 2019. More than 20 experts and scholars from CISFC,insurance companies, securities companies, universities and research institutions discussed the situation and risks in life insurance, property insurance and investment of insurance funds in Q1 2019. Committee Chairman Wei Yingning and officials from the CBIRC, the People’s Bank of China and Beijing Bureau of the CBIRC attended the meeting as invitees. Also in attendance were CISFC Vice Chairman Yi Cheng, Deputy General Manager Wei Zhuyong, Secretary of Discipline Inspection Commission Zhang Zhongliang and Assistant General Manager Zhou Fuping.


The life insurance sector achieved fast increase in premium income, step-by-step improvement in business structure, and a milestone in its own transformation. According to the attending experts, although the health insurance business kept growing rapidly for the time being, the products were seriously homogenized; and some insurers achieved their growth by lowering price, expanding the range of the covered diseases, and raising the level of sum insured. As a result, there was a strong trend of non-rational competition in the market. Meanwhile, changes in the incidence of some critical illnesses, surging medical insurance claim payment expenses, and aggressive product pricing had increased insurers’ potential risk of loss. In addition, the experts indicated there existed an obvious Matthew effect in the life insurance market, i.e. small and medium-sized insurers are under great business pressure in fierce competition due to the lack of a development path suitable to their positioning, a customer need-oriented business strategy, and a sustainable channel development model.


The growth of the property insurance sector as a whole slowed down. In Q1, the growth of premium income in the property insurance sector dropped by 4.51 percentage points year on year. The market share of non-auto insurance continued to increase, up by 4.68 percentage points year on year. Market chaos, such as industry-wide loss in underwriting, slightly growing combined ratio, rising claim payment expenses and declining premiums, and high level of premium in the auto insurance market, remained unaddressed. The experts pointed out that the profit-seeking nature of insurers would make them invest a lot of money to scramble for business when the auto insurance business was profitable. They believed the commercial auto insurance required further reform, in parallel with the mandatory motor vehicle traffic liability insurance reform, to improve the market exit mechanism. In addition, continuous attention was required to be paid to a range of risks, including the continued rising of premium receivable ratio in the non-auto insurance business, inadequacy of risk control in the guarantee insurance business, etc.


The amount of funds invested by insurers was growing steadily, with their asset allocation structure remaining stable and return on investment increasing slightly year on year. The allocation of insurance funds had become more challenging under the impact of the downward long-term interest rate. Although the stock market was improving, there was still latent risk in some insurers’ stock investments. The experts believed life insurers were exposed to two material risks, i.e. reinvestment and interest spread loss risks, and had to pay close attention and respond to credit risks from bonds and non-standardized products.