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B5B China
China is the world’s second largest economy and, according to Swiss Re’s Sigma, its insurance market
China is the world’s
second largest ranks as the third largest in the world. In 2016, total insurance premium reached RMB3,096bn of which
economy RMB1,352bn (or 44%) was in respect of non-life business.
For many years, the People’s Insurance Company of China (PICC) enjoyed a monopoly in the insurance
market. Today, the non-life insurance market is dominated by three insurers: PICC P&C, China Pacific
Property Insurance Company (CPIC) and Ping An P&C.
Many foreign insurers now operate in China but their market share remains low for various reasons. This
is, however, expected to continue to grow sharply as more and more carriers are permitted by the China
Insurance Regulatory Commission (CIRC) to write compulsory motor third-party liability insurance. Motor
insurance comprises the largest share of China’s non-life business and the next largest sectors are
commercial property then agriculture and liability.
As regards reinsurance, China Reinsurance is the nation’s largest reinsurer and, according to A.M. Best’s
Increasing interest
from global reinsurers 2016 ranking, the eighth largest global reinsurer. Foreign reinsurers with branch operations include the
major European carriers and Lloyd’s, but there is increasing interest from global reinsurers in Bermuda
and London in view of the country’s potential for growth. In the meantime, it remains a fiercely
competitive and highly regulated market.

The CIRC is committed to regulatory reform. For example, enhancements are planned to the supervision
of reinsurance business which reaffirms its position that underwriting profits should not be transferred
abroad by way of affiliated reinsurance transactions. Interestingly, it has also recently approved China
National Petroleum Company (CNPC) to establish the first onshore captive insurer in China. As China
seeks to internationalise the RMB, China Re is also looking to expand internationally and has overseas
subsidiaries and representative offices in London, New York and Hong Kong.

B5C India

As the second most populous nation and one with comparatively good economic prospects and low
India presents huge
potential insurance penetration, India also presents huge potential opportunities to global reinsurers. Since
opportunities to liberalisation under the Insurance Regulatory and Development Authority Act 1999, public sector Reference copy for CII Face to Face Training
global reinsurers
exclusivity has been abandoned in favour of market-driven competition and yet the market is dominated
by the public sector undertakings: New India, Oriental, National and United India. Strong distribution
networks and large historic reserves have ensured that these companies underwrite the majority of the
non-life business. At present, the vast majority of all non-life premiums are still distributed through
legions of on-the-ground direct sales agents who are largely employed by those companies.
As the sole domestic reinsurer, government-owned General Insurance Corporation (GIC), provides
reinsurance to the general insurance companies in the Indian market and receives an obligatory
statutory cession of 5% on each and every policy subject to certain limits, leading many of those
companies’ treaty programmes and facultative placements. GIC is reported to have written net premium
of US$4,675m in 2016.
Historically, no other reinsurer had a licence to carry out reinsurance business in India. Overseas
reinsurers either operated through representative (not branch) offices or reinsurance intermediaries and
satisfied a minimum rating stipulated by the insurance regulator, the Insurance Regulatory and
Development Authority of India (IRDAI). However, in late 2015, laws were passed increasing the foreign
investment cap in the insurance sector to 49% and, crucially, permitting overseas reinsurers to open
branch offices to carry out reinsurance business in India.
9 As at October 2017, Lloyd’s, Munich Re, Swiss Re, Hannover Re and SCOR have all begun operations
Chapter through local branches.

B6 Other significant world markets

B6A Australia

In recent years, mergers and acquisitions have reduced the total number of private sector insurers
writing general insurance business in Australia. These companies are supervised under the local
Insurance Act and the largest are QBE, IAG and Suncorp.