China shocked the planet last week when the idea suddenly announced the idea could finally make some moves to open up its financial sector to more ownership by international investors.
nevertheless the idea’s not just overseas companies in which stand to benefit: One important Chinese sector will grow stronger, experts said.
Like many parts of China’s financial industry, insurance will be under scrutiny by Beijing for firms’ outsized risk appetite, including the issuance of high-yield, short-term life insurance and also also also various other investment products. nevertheless those same insurers currently stand to be the biggest beneficiary of the brand new investment rules.
in which will be, with the expectation of more competition and also also also emphasis on best practices, the industry will likely see better products and also also also standards, analysts said. In fact, the management in China should begin adopting better strategies for risk management — a persistent issue inside the planet second-largest economy.
“The Chinese insurance sector’s risk management remains inside the developing stage, and also also also therefore could benefit by a greater influx of overseas practices and also also also professional personnel,” said Eunice Tan, an analyst at Standard & Poor’s Global Ratings.
“We expect the increased foreign-insurer participation will promote the development of more sophisticated products with higher margins and also also also more recurring premiums such as pensions, retirement planning and also also also healthcare insurance, areas undeserved by domestic insurers,” said Moody’s Investors Service in a note This specific week.
Chinese authorities have been sounding warnings and also also also taking decisive steps to crack down on excessive risks inside the financial system This specific year.
Just on Thursday, a senior official at the China Insurance Regulatory Commission said the country will tighten regulations on the use of insurance funds to curb “financial chaos,” Reuters reported.
In July, a senior Chinese insurance regulator warned of multiple risks inside the industry, including liquidity, state news agency Xinhua reported. and also also also a month earlier, authorities detained the chairman of insurer Anbang — best known for its 2015 purchase of brand new York’s landmark Waldorf Astoria hotel — in what industry experts called a “house-cleaning” of those associated with high-yield insurance products.