The Chinese insurance market experienced a largely favorable environment in the fourth quarter of 2024, with insurers implementing rate decreases to retain existing business and secure participation in key programs, according to Aon’s latest Global Insurance Market Insights report.
The report highlights an intensifying competitive landscape, particularly for risks with favorable loss ratios and desirable occupancy classes. Despite this, underwriters are maintaining a focus on sustainable pricing in the face of declining bank interest rates.
In particular, new energy sectors, such as photovoltaic and lithium-battery risks, are becoming more challenging for insurers. These sectors are undergoing a reassessment of underwriting strategies after experiencing substantial losses.
Capacity remains plentiful across several insurance lines, including Property, Casualty, and Directors & Officers (D&O) insurance. However, challenges persist in certain sectors. Cyber underwriting is notably strict for new clients in emerging industries, and commercial automobile insurance, especially for trucks and taxis, continues to face difficulties in placement, according to Jia Dai, CEO of Aon-COFCO’s Commercial Risk Solutions.
Pricing pressure is inconsistent across different product lines and locations, but overall, the increased competition is driving rates down for risks with favorable loss histories. While insurers generally have enough capacity for most types of risks, they are adopting a more cautious approach when covering properties exposed to natural catastrophes.
The underwriting environment remains cautious yet competitive, with favorable terms available in certain market segments. Most insurance placements are renewing with expiring terms, limits, and deductibles, though risks that have experienced large losses are facing upward pressure on deductibles.
Though insurers are still offering expiring terms and conditions, they are showing a reduced appetite for certain commercial risks, particularly trucking and taxi-related policies. In the casualty and liability insurance space, market conditions remain favorable, though international insurers continue to impose exclusions related to PFAS (per- and polyfluoroalkyl substances).
The cyber insurance market remains relatively stable, with some capacity increases seen during renewals. Underwriting for new risks in emerging industries remains strict, but insurers are offering localized solutions, including extended coverage options and incident response services.
The Directors & Officers (D&O) insurance market is experiencing strong competition and abundant capacity, which is driving down pricing and potentially reducing retention levels. Meanwhile, property insurance continues to show favorable conditions, with healthy underwriting results allowing for modest rate decreases for targeted risks.
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