Foreign insurers could be allowed to offer third-party liability insurance
October 27, 2011 Category Automotive, Automotive Metals & Minerals
The Chinese government is considering to allow some foreign insurers to sell third-party liability insurance to car owners. Foreign insurers would need to meet criteria for profitability, solvency, the size of their parent companies and operating history in China. Last year, China’s 33 property insurers posted a combined CNY7.2 billion in losses on third-party liability insurance for car owners, equal to 9.6% of their earned premiums. “The new policy would have limited market impact,” said Industrial Securities Analyst Zhang Ying. “This is a stable market with established domestic insurers and premiums set by the regulator.” Foreign property insurers, which have about a 1% share of the market, were not keen about moving into car insurance as there was limited scope for competition, industry sources said. Vehicle insurance premiums accounted for about 75% of the CNY400 billion of property insurance premiums in China last year. In the case of PICC Property & Casualty Company, the nation’s biggest non-life insurer, the figure was 80%.
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