Product diversity and complex market dynamics may delay visible improvement.
New guidelines for China’s non-motor insurance sector are credit positive because they are expected to strengthen product governance, market conduct and oversight of intermediaries, according to Moody’s Ratings.
Frank Yuen, senior vice-president at Moody’s Ratings, said the measures issued by the National Financial Regulatory Administration should also improve underwriting profitability across non-motor insurance lines by promoting greater market discipline.
However, improvements are likely to take longer to emerge than in the motor insurance sector, Yuen said.
This is because non-motor insurance covers a wider range of products and has more complex market dynamics, making it harder for regulatory changes to produce immediate improvements in underwriting performance.
The guidelines establish a comprehensive regulatory framework for the non-motor insurance sector, according to Moody’s.
