CISFC held the 22nd Meeting of the Risk Assessment Expert Committee for Insurance Industry online from July 8 to 9, 2021. The meeting consists of three sessions on the theme of property insurance, life insurance, and funds utilization, respectively. More than 50 experts and scholars from insurance companies, insurance asset management companies, securities companies, and research institutions exchanged views on the market situation and risks faced by the insurance industry since the start of the year.
In the life insurance segment, insurance premiums increased at a slower pace year-on-year in the first five months, while net profit rose at a faster pace. Industry liquidity remained stable on the whole. Given the slowly growing premium income and less-than-expected new policy sales, individual agents face the challenge of expanding sales channels. Further, the quality of insurance policy has trended downward. Hence risk management and control should be enhanced over health insurance products such as critical illness insurance, Huiminbao (an inclusive medical insurance product), and multi-million-yuan medical insurance. Mismatch between the supply and demand of life insurance products should also be corrected.
In the property insurance segment, premium income rose year-on-year in the first five months, with mixed performance for different products. Specifically, income from motor insurance shrank, while that from non-motor insurance increased, resulting in a more balanced product structure. Net profit fell slightly and came mainly from funds utilization. Small- and medium-sized insurers found more difficulties in running their motor insurance business. Accident and health insurance expanded, but at a constant loss. Credit insurance also saw an increasing risk of bad debt. Considering frequent earthquakes in several provinces and gloomy climate records this year, catastrophe risk should not be overlooked.
In terms of funds utilization, an increasing amount of funds was allocated to a generally steady mix of asset classes in the first five months, generating higher returns than in the same period of the last year. Credit default remained high, making it harder to control credit risk. Equity price risk rose significantly due to the uncertainty and instability of external environment. Medium- and long-term interest rates have trended downward, which heightened the risks of spread loss and reinvestment.