CISFC held the 23rd Meeting of the Risk Assessment Expert Committee for Insurance Industry online from October 14 to 15, 2021. The meeting consists of three sessions on the theme of property insurance, life insurance, and insurance funds investment, respectively. More than 40 experts and researchers from insurance companies, insurance asset management companies, insurance securities companies, and research institutions exchanged views on the market situation and the risks facing the insurance industry in the first three quarters of the year.
In the property insurance segment, premium income rose year-on-year under a more balanced product structure. Net profit came mainly from investment returns, helping the industry maintain capital adequacy as a whole. Specifically, auto insurance witnessed higher loss ratio and lower expense ratio, with small- and medium-sized insurers finding it challenging to stay afloat. Several types of non-auto insurance saw falling premium rates and signs of risk concentration, contributing to an ever-stronger re-insurance market. Some insurers, lacking clear growth strategies, were pursuing profit targets by lowering reserves and undercutting prices. Floods and other catastrophic risks were also having a greater impact on the industry.
In the life insurance segment, business scale expanded year-on-year, and at an accelerated pace since June. Industry liquidity remained stable on the whole. At the end of Q2, solvency ratio stayed in the upper end of the reasonable range. The growth momentum of premiums from new policies recovered, though still falling short of expectations. The individual agency channel has been under constant pressure due in part to the loss of salespersons. New critical illness insurance products generated less-than-expected revenue, but made ever-rising payouts. In summary, the gap between the supply and demand of life insurance products is yet to be closed.
In terms of insurance funds investment, despite a complex external environment, investment steadily grew and was allocated to a generally steady mix of asset classes, through yielding lower returns than in the same period last year. Credit risks remained a prominent issue, with the equity market showing greater fluctuations and concentration risks in fixed-income and equity investment calling for close attention, all of which make it more important to manage investment risks in practice. Medium- and long-term interest rates have trended downward, highlighting the risks of loss from interest spread and reinvestment.