Fitch Ratings has observed a slowdown in China’s life insurance industry growth during its current business transformation phase. In contrast, the non-life insurance sector has seen growth, supported by favorable policies. For the first four months of 2025, life insurance premiums rose by 1% year-over-year, while non-life insurance premiums increased by 5%.
In the prevailing low-interest-rate environment, life insurers have been shifting their focus towards participating products that offer lower guaranteed rates. This strategic move aims to mitigate the risk of negative spread, although it has made these products less appealing to customers. The implementation of acquisition cost controls in the third quarter of 2023 is expected to moderate the growth in bancassurance channels throughout 2024. Furthermore, Chinese regulators tightened controls over agent commission costs in the second half of 2024, which could potentially dampen premium growth prospects for the insurance industry as a whole but may improve profit margins.
