The risk profile of Chinese life insurance companies is forecast to improve in the longer term as the regulator has taken more stringent measures to crack down on short-term savings-type products and enhance asset-liability management and information disclosure, according to Fitch Ratings.
Fitch says these tighter regulations are positive for the industry and also reflect the regulator’s emphasis on protection products and determination to curb the formulation of misleading products.
Asset-liability management is also one of the key areas the regulator is focusing on for the newly launched tax-deferred pension insurance product due to its long-term features.
The authority is also requiring insurers to carry out a thorough life insurance product clean-up by the end of the first half of 2018.
The measures are likely to strengthen underwriting profitability as insurers have improved their product mix and increased focus on protection products in line with the regulator’s requirements, although top-line premium income may see sluggish growth in 2018.
Fitch forecasts the credit metrics of rated life insurers to remain stable in 2018, supported by solid business profiles, sufficient capital buffers and strong new business value growth.
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