Country Snapshot

    • Lloyd’s China Beijing branch was officially opened on Monday 16 March. Lloyd’s was awarded a licence to open the branch in September 2014, as part of the UK-China Economic and Financial Dialogue.

    • The Beijing branch licence permits Lloyd’s underwriters to provide specialist insurance and reinsurance cover for Beijing risks.

    • Lloyd’s underwriters in China focus on a range of speciality insurance products including specialist marine cargo, renewable-energy technology and agriculture.

    Source: Lloyd's, (May-2015)

    • STRENGTHS

      • Political stability is set to prevail despite rising instances of social unrest.
      • China has a highly centralised national policy framework and stable government, which delivers comparatively predictable policy output.
      • The control exerted by the Chinese Communist Party (CCP) ensures that security risks are not a major threat to business.
      • The stimulation of growth in the interior and the western hinterlands, coupled with continued reform of the rump state sector, remains a central domestic policy priority.

       

      WEAKNESSES

      • China has a functioning legal system, but it remains heavily politicised.
      • Bureaucracy, corruption, and a lack of transparency are key obstacles to conducting business in China.
      • China's substantial wealth gap and the limited role of tax in wealth redistribution have fuelled social discontent. This is likely to prompt increased funding for education, healthcare, infrastructure, and pensions, which should force the tax rate upwards.
      • By fuelling social instability in the form of protests across China, corruption poses one of the most serious threats to the long-term political and economic viability of the country.

       Source: IHS Global Insight, www.ihs.com, (May-2015) 

    • THE CHINESE NON-LIFE INSURANCE MARKET IS ESTIMATED TO BE AROUND US$ 87.3BN IN 2012: The Chinese Government is committed to reforming the economy and has emphasised the need to increase domestic consumption to make China less dependent on foreign exports for GDP growth. Accordingly, rapid development of China’s economy is expected, which is also expected to stimulate demand for specialist insurance products. Currently, the insurance market is growing rapidly but is dominated by motor lines (75% of GWP in 2012).

      MARKET PLAYERS: The market is dominated by state-owned and local players, with foreign insurers only servicing few clients in comparison. There is intense competition amongst domestic rivals, whilst foreign companies have so far made modest inroads, mostly in lines where there is less local expertise.

      BROKER MARKET: China is a largely untapped and continuously developing market. The direct market is currently dominated by direct sales forces and has only an emerging broking channel. 2012 official CIRC figures indicate that direct premiums handled by brokers have reached US$ 3.82bn in Q3 2012. Taking these CIRC figures on an annualised basis, therefore equates to direct premiums handled by brokers of around US$ 5bn. Accordingly, brokers are estimated to have a market share of  around 14% (discounting standard motor lines, which currently account for 75% of the total market).

      OUTLOOK: The non-life market has been growing by around 25% a year since 2003. This rate of increase has continued in 2012, partly because of another record year for new car sales, and partly because of high rates of fixed asset investment resulting from loose monetary conditions and the government's US$ 600bn stimulus package. China is the fast-growing economy in the world and is currently the sixth largest insurance market in the world, but is forecast to become number two behind the US in the next 10 years. Premium-wise, the total China market grew by 27.9% whilst global insurance premiums grew by 2.7%.

      Source: Market Intelligence, Country Profile, April 2014            

    • NATURAL DISASTERS

      Top Natural Disasters 

      Date 

      Damage (000 US$) 

      Earthquake (seismic activity)  12-May-08  85,000,000 
      Flood  01-Jul-98  30,000,000 
      Extreme temperature  10-Jan-08  21,100,000 
      Flood  29-May-10  18,000,000 
      Drought  01-Jan-94  13,755,200 
      Flood  30-Jun-96  12,600,000 
      Flood  23-Jun-99  8,100,000 
      Flood  21-Jul-12  8,000,000 
      Flood  23-Jun-03  7,890,000 
      Flood  01-Jun91  7,500,000 

      Source: The OFDA/CRED International Disaster Database – www.emdat.be, Université Catholique de Louvain, Brussels (Belgium); http://www.emdat.be (June 2014)

    Country Profile

    Country ProfilesCountry Profiles provides individual summaries for Lloyd’s key territories. These profiles contain factsheets on the economy, insurance market and Lloyd’s business.

    If you wish to access the document please email Market Intelligence at WMID@lloyds.com.

    China Country Profile (Jul-2016)

    Market Presentations

    Market Presentations

    Market Presentations contain local insights offered by Lloyd’s Country Managers on opportunities and challenges for Lloyd's in their markets.

    If you wish to access the document please email Market Intelligence at WMID@lloyds.com.

    China Market Presentation (Sept-2016)

    Class Review

    Class reviewClass Review is Lloyd’s newest report that, for the first time, offers benchmarking analysis comparing Lloyd’s business with its competitors in key territories, broken down by specialty class of business.

     

     

    Key findings within Class Review China are:

    • The non-life insurers have enjoyed a good year in 2013 with a paid claims ratio of 43%.

    • Total insurer ceded premiums saw a significant increase of 37% in 2013.

    • The economy has showed signs of maturing with a decline in GDP growth in recent years from 10.5% in 2010 to 7.3% in 2014. The Chinese government is introducing reforms to address this, which could have a significant impact on the demand for insurance.

    • Agriculture has recently seen substantial increases in government subsidies, and has proved to be returning increasingly profitable business for insurers.

    If you wish to access the document please email Market Intelligence at WMID@lloyds.com.

    For Managing Agents:

    Class Review China (2015)
     
    For Brokers:

    Class Review China (2015)

     


    Market analyst

    Shruti Sharma

    Analyst, Market Intelligence

    t: +44 (0)20 7327 6209
    Shruti.Sharma@lloyds.com

    China Contact

    Eric Gao Lloyd's China

    Eric Gao

    CEO of Lloyd’s Insurance Company (China) Limited

    t: (86) 21 6162 8200
    f: +86 21 6162 8250
    Eric.Gao@lloyds.com

    China office

    Global officesTo learn more about Lloyd's in China please visit our China website.

    China website

    Useful Links

    China Financial Services Regulator:

    CIRC

    China Insurance Association:

    IA China

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