On October 25, the China Banking and Insurance Regulatory Commission issued a document introducing the high-quality development results of the property insurance industry and the effectiveness of actively serving the construction of a modern socialist country.

In adhering to the standard, based on the main business, and accelerating the transformation and upgrading of the industry, the Banking and Insurance Regulatory Commission revealed that the property insurance industry adheres to the source of insurance protection, and the high-quality development of the industry has reached a new level. First, the business continued to develop rapidly, and the insurance structure was gradually optimized. The original insurance premium income of the property insurance industry increased from 553.01 billion yuan in 2012 to 1.4 trillion yuan in 2021, with an average annual growth rate of 10.6%. It has become one of the fastest growing and most dynamic industries in the national economy, and its business scale ranks second in the world. The proportion of auto insurance premiums, the largest type of insurance, has been adjusted from 72.4% in 2012 to 56.8% in 2021, and the structure of insurance is more balanced.

Second, the market system has been continuously improved, and the competition pattern has basically taken shape. Up to now, there are 89 direct insurance companies in the property insurance market, of which 67 are Chinese-funded and 22 are foreign-funded. The number of professional companies has reached 16, and various organizational forms such as joint-stock companies, limited liability companies, captive insurance companies and mutual insurance societies have initially taken shape, as well as a diversified market pattern featuring fair competition, common development and increasing openness between China and foreign investment. The concentration of the property insurance market has gradually decreased, and the market share of the top three companies in the premium scale in 2021 is 63.6%, which is 1.7 percentage points lower than that in 2012.

Third, the level of risk protection has been continuously improved, and the functional role has been increasingly played. In 2021, the risk protection provided by the property insurance industry reached 10,860.3 trillion yuan, 95 times the GDP in the same period, with an average annual growth rate of 43.5% in the past decade. The property and casualty insurance industry has played a positive role in the recovery and reconstruction of major disasters. In 2013, the "Fete" typhoon insurance paid out about 6 billion yuan, the "Hynix" fire insurance paid out 5.42 billion yuan, and the Henan and Shanxi heavy rainfall insurance paid out 12.1 billion yuan in 2021, of which the Henan heavy rainfall insurance paid out 10% of the direct economic losses.

Fourth, the effect of transformation and upgrading was prominent, and the operating efficiency remained stable. Insurance companies use advanced technologies such as blockchain, the Internet of Things, and artificial intelligence to continuously empower their businesses, make continuous innovations in core links such as precision marketing, precision pricing, intelligent claims, and quality control, and realize the transformation from a product-centric to a customer-centric new business model and organizational structure, and significantly improve operational efficiency. In the past ten years, the industry has maintained an overall operating profit, with an average annual net profit of about 40 billion yuan.

Fifth, the products and services continue to be rich, and the coverage area is gradually expanded. Traditional products such as auto insurance, home property insurance, enterprise property insurance, agricultural insurance, liability insurance and credit guarantee insurance have been further enriched. Personalized and distinctive new products such as return freight insurance, flight delay insurance and index insurance have been continuously emerging, and online services have been continuously enhanced to provide customers with more convenient, transparent, diversified and efficient insurance services. Better meet the people's growing demand for insurance. The service field has been continuously expanded, basically covering all fields of national economy and people's livelihood, and becoming an important market mechanism for the government to carry out social management.

Sixth, steady progress was made in the construction of the reinsurance system, and the risk transfer and diversification mechanism was gradually improved. At present, there are 15 professional reinsurance companies, including 7 Chinese and 8 foreign reinsurance companies, and the number of reinsurance companies increased by 6 compared with 2012. By the end of 2021, 529 overseas reinsurers have completed the registration of the reinsurance registration system, providing supplies to China's reinsurance market through cross-border transactions. In 2021, China's reinsurance market will distribute about 105 billion yuan in premiums to overseas markets.

Seventh, the capital strength continues to increase, and the overall risk of the industry is controllable. By the end of 2021, the total assets of the property insurance industry will be 2.5 trillion yuan, the net assets will be 736.19 billion yuan, and the paid-in capital will be 350.05 billion yuan, 2.6 times, 3.3 times and 2.1 times of the end of 2012, respectively, with an average annual growth rate of 11.1%, 14.3% and 8.5% in the past decade, indicating a significant increase in the capital strength of the industry. The overall solvency is adequate, with a core solvency adequacy ratio of 203.7% and a comprehensive solvency adequacy ratio of 238.5% at the end of the second quarter of 2022. Of the 89 property insurance companies, 86 had sufficient solvency and no systemic regional risk occurred.

Source: Beijing Business Daily