China’s insurance sector is forecast to record double-digit new business value growth this year, because of demand recovery and moderated asset/liabilities risk.
It is estimated life insurers’ new business value will grow at around 11.8% this year as consumers seek more protection, insurance agents’ offline activities will be less restricted and underwriters place greater focus on their jump-start campaigns, reported the news website Shine, quoting Mr Craig Cao, UBS China non-financials analyst.
An earlier launch of the insurers’ new-year jump-start sales and more diverse, shorter-term products will help underpin the pace of their full-year product sales as well as agent retention and productivity gains. This will potentially bolster full-year premium and new business value growth.
Following an upturn in the 10-year China government bond yield, UBS believes the overhang from insurance firms’ reinvestment income risk has receded. Economic re-acceleration will translate to lower default rates and bad debt risk. All of this will be conducive to the sector’s growth recovery.