2016 China P&C Reinsurance Market Seminar was held in Chengdu on 28 September. Facing further slowdown in property and casualty (P&C) insurance market, rapid growth of indemnity and accumulation of catastrophe insurance liability and a greater operation risk in the industry during the year, China Reinsurance Group made a commitment to the representatives of the domestic insurance institute that “Reinsurance is always the core business” by consolidating reinsurance as the core business in the China Reinsurance Group and boosting innovation, transform and upgrade in the industry. According to the new strategy, the property and casualty reinsurance segment will implement a series of reform initiatives with “lantern effect” in the near future.
Yuan Linjiang, Chairman of the China Reinsurance Group, said that, as a strategic control group company, China Reinsurance Group has commenced the strategic and organizational consulting projects with a new strategic direction of “One Three Five”, which was “One Core (representing reinsurance as the core business), Three Breakthroughs (namely innovation, coordination and transform) and Five Achievements (in respect of size, layout, technology, culture and organization)”. As introduced, the reform initiatives of the P&C reinsurance segment mainly focusing on three aspects: firstly, is respect of development layout, China Re P&C will unify the domestic and overseas P&C insurance business management of China Reinsurance Group in order to share the resources of both domestic and international business, develop new international technology and products and attract innovative talents for domestic market. Secondly, in respect of key business areas, we focus on achieving breakthroughs in national strategic businesses such as catastrophe insurance, agricultural insurance and “One Belt One Road” and considering the establishment of a Catastrophe Insurance Research Center and a catastrophe risk database and the “One Belt One Road” community for supporting the national strategy and economic development with a great effort. Thirdly, in respect of innovative service, we devote more effort to cooperate with our clients, boost the all-round and collaborative development in respect of technical services, product innovation and customer development, strengthen the transform development, establish a new model of innovation as well as actively seize the new business opportunities in liability insurance and technology insurance driven by functional transformation of the government and technology development. The group company has established a strategic customer department for providing premier customer service, including direct insurance companies, with a great effort.
Zhu Jinyuan, Chairman of China Insurance Industry Association, said on the seminar that, 2016 is a critical year for China’s insurance industry to compete for becoming the second largest insurance market in the world by keeping and increasing its strengths during the ”Thirteenth-five plan”. At the same time, risk components of China’s insurance market is undergoing a significant change by occurring many risks such as catastrophe risks and new risks at a rapid pace, which continues to impact the industry and raises new challenges for the risk control management. Reinsurance is the “stabilizer" and "relief valve” of the industry. The benign interaction between reinsurance and direct insurance and the risk scattered by reinsurance as well as the capital financing and technology transfer of core function of reinsurance, are the important systemic arrangements for achieving the healthy development of reinsurance industry. China Reinsurance Group is the only reinsurance group company in the PRC. It is expected that China Re P&C, as the chief committee member of the PI property reinsurance professional committee, will cooperate with other companies in the industry to bring a better development for the insurance and reinsurance businesses as a whole. It is also expected that the industry committee will further cooperate with China Re P&C in various aspects or fields in the future so as to make a contribution for the healthy and sustainable development of the industry.
“China Re P&C has been actively participating in the industrial development activities with regulatory department and other companies in the industry since the beginning of this year, including the active promotion of implementing the urban and rural residential earthquake catastrophe insurance system, a special research on catastrophic typhoon and catastrophe insurance in the Southeast coastal area, the launch of “transition from business tax to value-added tax “ reform pilot program of the P&C reinsurance and standardization of the operation procedure of the P&C reinsurance industry as well as the performance of the management function of agricultural community.”
Li Yuanyuan, general manager of China Re P&C, said that, since the launch of premium car pricing tool during last year, China Re P&C has launched the general aviation pricing tool today, which will be used on the insurance management, introduced the research and practice of solar radiation power index insurance products, studied the urban waterlogging risk, which is highly concerned by the public, and the way to solve it, further accelerated the business innovation, channel expansion and platform establishment, and continued to enhance the risk management ability in order to provide a comprehensive and reliable reinsurance protection and risk solutions.
As analyzed in the seminar, although the sales volume of vehicle has shown a sign of increase in a steady pace after making a significant macroeconomic adjustment, the P&C insurance market is likely to remain slowdown as a result of the material reforms such as “transition from business tax to value-added tax” and change of commercial vehicle fees. With slowdown in the growth rate of premium and rapid growth in growth rate of indemnity and accumulation of catastrophe insurance liability, the overall operational risk is still increasing in the industry. As self-insurance, mutual insurance and internet insurance as well as new entities with professionality or geographical resources advantages are increasing, it is expected that the establishment of an innovative insurance trading platform will further diversify the form of business and its operation model and enhance the innovative ability and serve in the industry. After changing the commercial vehicle fees, the operation of vehicle insurance has further differentiated. Pricing, customer base and service are the critical factors for competition in the future. Raising new ideas are essential for non-vehicle insurance business. Emerging business such as catastrophe insurance, agriculture insurance, liability insurance and technology insurance, and the national strategic business of “One Belt, One Road” become the new market hot issues and growth drivers. Although the credit supervision system of reinsurance business has been improving and the non-vehicle reinsurance business shows an increasing trend, certain difficulties regarding to rates, technology and talents are still exist. Leveraging on the advantages of project design, product development, data analysis and international experience, reinsurers are able to contribute to the innovation and transformation of the industry.
The seminar on property and casualty reinsurance market in China convened by China Re P&C this year has come to the sixth session since 2011. Representatives from Insurance Association of China and Insurance Exchange of Shanghai as well as representatives from PICC Group, China Pacific Insurance and Ping An Insurance and other insurance institutions from over 70 countries have participated in the seminar. During the seminar, an assessment analysis on the current situation of property market in China of 2016 was made with a deep discussion on reform and innovative hot issues of property industry. Zhang Qing, chief risk management officer of PICC P&C, Chen Sen, chief auditor of China Pacific Insurance, Wang Jiajun, general manager of Dinghe Insurance, Gu Yong, vice chairman of Yongan Insurance, and Zhou Xianhua, vice chairman of Auhua Agricultural Insurance, have shared their ideas about the topic “innovation and risk management of insurance”.