At the 2025 Lujiazui Forum on June 19, Yin Jiang’ao, director of the Property Insurance Department (Reinsurance Department) of the State Financial Regulatory Commission, emphasized that insurance is a crucial tool for risk management in the economy and society. Reinsurance, he noted, acts as a “regulator” for the stable operation of the insurance market and serves as the “insurance of insurance.”
Key Points
Market Potential: China’s insurance market has broad prospects, and reinsurance should play a significant role in its development.
Economic Context: Last year, China’s GDP was approximately $19 trillion, accounting for 18% of the global total. However, China’s premium income was about $800 billion, accounting for 11% of the global total. The insurance depth (premium/GDP) in China is 4.2%, compared to a global average of 7%. The insurance density (per capita premium) in China is $568, compared to a global average of $883.
Reinsurance Penetration: 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 approximately $900 billion, with direct insurance premiums around $7.2 trillion, resulting in 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.
Actions for Reinsurance
Expand Penetration: Reinsurance should increase its penetration rate to better support the insurance market.
Act as a Regulator: Reinsurance can regulate both domestic and international insurance markets through pricing mechanisms, guiding trends in related insurance businesses and leveraging the advantages of both markets.
Enhance Professionalism: Reinsurance should focus on improving its professionalism, particularly in risk management, actuarial pricing, and data models. China’s reinsurance market is still in its early stages of development and needs to accelerate the improvement of its risk management system and data infrastructure to enhance professional service capabilities and levels.
Conclusion
Yin Jiang’ao highlighted the significant potential for growth in China’s insurance market and the critical role that reinsurance can play in this development. By expanding penetration, acting as a market regulator, and enhancing professionalism, reinsurance can contribute to the stability and growth of the insurance market, aligning China’s insurance industry with global standards.
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