China’s non-life outlook solid, thanks to motor segment: AM Best

China’s electric vehicle insurance has gained traction, driving motor insurance demand.

A stable outlook has been labelled for China’s non-life insurance segment, AM Best reported. The top line of the non-life market is growing, driven by the recovery of the domestic economy post-pandemic restrictions. 

The motor segment is gaining momentum, especially in electric vehicle insurance. Non-motor lines of business are expected to be key growth drivers, and the industry's solvency position remains robust despite higher capital requirements under C-ROSS Phase II.

However, uncertainties persist due to a weaker macroeconomic growth outlook, lower investment yields, and ongoing credit concerns related to local government financing vehicles. 

China has set a full-year gross domestic product (GDP) growth target of around 5% for 2023, and the government is implementing policies to boost consumption and industrial activities.

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In the first nine months of 2023, China's non-life insurance market showed strong performance, with direct premiums written rising by 7.3% to $166.4b. 

Compensation and payouts increased by 17.3% due to worsening claims frequency following the post-pandemic rebound in road traffic.

Premium growth was notable in agriculture (up 19%), health (up 11%), and liability lines (up 10%). 

Motor insurance remained the largest line of business, accounting for 51% of direct premiums written, followed by health (13%), agriculture (10%), and liability (8%). 

Despite challenges, the non-life insurance sector in China continues to outpace general economic growth.