Insurance claims from widespread flooding in China, along with slower premium growth due to the coronavirus pandemic are expected to undermine the underwriting results of Chinese non-life insurers and squeeze margins there, according to Fitch Ratings.

Further, even though the overall penetration rate for catastrophe coverage is not high, cat risks are considered to pose a threat to Chinese insurers' financial viability as limited claims statistics, increased frequency of extreme weather events, and the geographical diversity in China challenge insurers' ability to enhance their sophistication in pricing and modelling risks there.

Nonetheless, depending on the reinsurance structure and coverage limits, Fitch expects direct insurers to recover part of their insured losses from the floods from reinsurers.
The rainy season is not over yet in certain parts of China.

Share Story: