HONG KONG, Dec 18 (Bernama-BUSINESS WIRE) -- China is increasingly becoming a difficult environment for non-life reinsurers, as competition and the regulatory environment are adding to top-line and profitability pressures. The Chinese life reinsurance market, meanwhile, has doubled its premium size since 2012 but must deal with heightened capital pressure, according to a new A.M. Best special report.
The Best’s Special Report, titled, “Reinsurance in China: Underwriting Challenges for Non-Life, Capital Pressure for Life,” states that many of the issues challenging non-life reinsurers have resulted from the implementation of the China Risk-Oriented Solvency System (C-ROSS). A glut of reinsurance capacity and growing retention by the direct industry pose clear threats to reinsurers’ profitability. In addition, the oligopolistic structure of the direct market gives large cedents more bargaining power not only on pricing, but also on terms and conditions, which has squeezed profit margins even further. For growth, non-life reinsurers are looking at Belt and Road initiatives and captive insurers, as well as potential business arising from the second phase of C-ROSS.
http://mrem.bernama.com/viewsm.php?idm=30806
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