On June 19, Yin Jiang’ao, director of the Property Insurance Department (Reinsurance Department) of the State Financial Regulatory Commission, spoke at the “High-Quality Development of Reinsurance” special meeting during the 2025 Lujiazui Forum. He emphasized that China’s insurance industry still has significant room for growth, and reinsurance should play a leading and promoting role in this process. He outlined three key areas where the reinsurance industry can make a greater impact.
Key Areas for Reinsurance Development
Expand Penetration:
Last year, China’s reinsurance premium was 259.5 billion yuan, with a direct insurance premium of 5.7 trillion yuan, resulting in a penetration rate of 4.6%. Globally, reinsurance premiums are 900 billion US dollars, with direct insurance premiums at 7.2 trillion US dollars, and a penetration rate of 12.5%. China ranks second in the world in direct insurance and seventh in reinsurance, but the penetration rate remains relatively low.
Act as a Good Regulator:
Reinsurance can play a regulatory role in both domestic and international insurance markets through pricing mechanisms, guiding trends in related insurance businesses, and leveraging the advantages of both markets. If a business struggles to break out in the international market, it indicates that its risk pricing may be insufficient and needs adjustment.
Enhance Professionalism:
The main advantage of reinsurance lies in its professionalism. As a technology-intensive industry, China’s reinsurance market is still in its early stages of development. Compared to the international market, it is not yet mature in terms of risk management, actuarial pricing, and data models. Efforts should be made to accelerate the improvement of the risk management system and data infrastructure, enhance professional service capabilities, and achieve progress through professionalism.
Accelerating the Development of China’s Reinsurance Market
To accelerate the development of China’s reinsurance market, better play the functional role of the insurance industry, and support the construction of a financial powerhouse, the Financial Regulatory Commission, in conjunction with the Shanghai Municipal People’s Government, jointly issued the “Implementation Opinions on Accelerating the Construction of Shanghai International Reinsurance Center” in August 2024.
The Implementation Opinions require that the registration and trading center be taken as the carrier to build an institutional aggregation center, a business trading center, and a risk management center.
Building the Reinsurance Center
Yin Jiang’ao believes that under the current global insurance market landscape, promoting the construction of a reinsurance center as a growth point for the development of Shanghai as an international financial center is not easy. He suggested efforts from three perspectives: jointly building a platform, improving rules, and creating an environment.
Platform Construction: The reinsurance registration and trading center has officially started operations, with a reinsurance business registration scale reaching 48.9 billion yuan and an online transaction scale of 2.1 billion yuan. However, more support is needed. All property insurance, life insurance, and reinsurance companies should be widely involved, especially large companies should take the lead. Only by jointly building platforms to promote the increase of registration and transaction volumes can an agglomeration effect be formed, which is also beneficial to the industry.
Rule Improvement: The Insurance Exchange and the Reinsurance Registration and Trading Center need to formulate the operation rules and other aspects of the platform well. More work could be done in aspects such as standardizing centralized clearing within the exchange, strengthening the management of performance execution, and clarifying and unifying the standards for registration information. It is also necessary to appropriately desensitize information to maintain information security.
Environmental Support: Yin Jiang’ao expressed the hope that the Shanghai Municipal Financial Services Office, the Lingang New Area, and others would continue to increase their care and support. He also hoped that various companies would offer some preferences to jointly create a better environment for the high-quality development of reinsurance and the construction of Shanghai as an international reinsurance center.
Conclusion
Yin Jiang’ao emphasized that insurance is an important tool for risk management in the economy and society, and reinsurance is the “regulator” for the stable operation of the insurance market and the “insurance” of insurance. He highlighted the great potential of the insurance industry and the important role that reinsurance should play. Building a reinsurance center depends on human efforts and collective support.
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