With a series of regulations issued this year, China’s insurance industry is expanding its capacity to serve the nation’s development strategies and the real economy, and thereby people’s livelihoods, a recent China Insurance Regulatory Commission report has shown.
The CIRC has made efforts to support innovation in insurance services, targeting weak links and key aspects in socioeconomic development, to improve the sector’s efficiency and ability to serve the real economy.
The report shows that insurance companies have been actively developing corporate property, engineering, liability and casualty accident insurance to provide a stronger guarantee against risks as the nation develops the real economy.
Under the guidance of the commission, insurance funds are flowing into China’s supply-side structural reforms and the Belt and Road Initiative, as well as regional development strategies.
The commission said it supports the use of insurance capital for major construction and public-private partnership projects. It also supports the industry establishing an investment foundation for poverty alleviation, as part of a targeted model that integrates charity, exchanges and insurance.
Support for technical insurance is increasing. The commission is promoting a subsidy mechanism for insuring the first unit of major equipment and the first use of new materials.
The CIRC is strengthening its supervision of insurance companies in a number of aspects, including minimum capital and solvency capacity requirements. The aim is to guide the industry back to its original function of securing the development of the real economy.
The critical illness, agricultural and catastrophe insurance sectors have seen fast growth. Renewed critical illness insurance programs in the first half of this year covered 846 million residents nationwide.
By July, agricultural insurance had provided guarantees for more than 190 kinds of crops belonging to 144 million farmers.
The structure of insurance products has been optimized, with guarantee-oriented products such as life insurance growing quickly, while short-term financing-oriented products are becoming less common. High-risk investment using insurance premiums has been effectively contained.
The insurance industry has provided more than 4 trillion yuan ($606 billion) in financial support for the nation’s major real economy projects, through infrastructure debt and equity programs.
The CIRC will continue to expand the methods for insurance capital to support the real economy, officials from the commission said.