China’s first mutual insurer, Zhonghui Property Mutual Insurance, has opened recently in Beijing, with a working capital of $146 million to begin its operations.
The mutual will offer credit insurance to small and medium-sized businesses and short-term health and personal accident insurance.
It’s the first to be launched out of three mutual Chinese insurance companies that received approval by the China Insurance Regulatory Commission, (CIRC) in July last year.
The International Cooperative and Mutual Insurance Federation (ICMIF) welcomed the approval, and reported that the two remaining mutuals, Xinmei Life Mutual Insurance and Huiyou Jiangong Mutual Insurance, are still waiting for the commission’s final review.
Zhonghui Property Chairman, Li Jing, said that a 21-member committee will be elected by the 546 members to oversee the daily business operation and the investments of the mutual.
The mutual insurer still awaiting launch, Xinmei Life Mutual, (Trust Mutual), will offer pension life and healthcare insurance, and is being set up to operate in conjunction with the Alibaba Group online payment services provider.
Trust Mutual will leverage the Alibaba’s Fintech platform and knowledge to offer insurance services to its existing customers – an example of how technology is shifting re/insurance customer proximity and experience.
China is one of the largest and fastest growing of the insurance markets, according to the ICMIF its industry has boomed with 188% growth in the last seven years and boasts CNY 3.1 trillion in premium in 2016, a figure that grew by more than a quarter from the year before.
Until recently, these staggering growth figures attracted reinsurers from across the globe, who saw a gleaming market opportunity in China’s fast-developing economy.
China announcing the launch of its first mutual insurers, is just one example of how local companies are now entering the market, and global reinsurers fear they will be squeezed out of much of their profitability.
As a result of this growing local competition and thinning business margins, three of the world’s largest reinsurance firms have all recently pulled back on their China underwriting.
And on a global scale, reinsurers seem to be on the verge of a gradual role reversal, as the Chinese re/insurance sector matures, takes on a growing market share of its home market, and sends initial offshoots into the international re/insurance domain.
