Global View

AM Best: Foreign Investment in China's Life Sector Set to Rise

China’s life insurance sector poses many opportunities for foreign capital

April 05, 2019 — OLDWICK, N.J.–(BUSINESS WIRE)–In a new episode of AM BestTV, James Chan, senior financial analyst, AM Best, said China’s move to raise limits on foreign ownership of insurance companies will benefit the country’s insurance industry and that China’s life insurance sector is poised to see expanded foreign investment. View the episode here.

“Last year, China made a regulatory move to lift the cap on foreign ownership of insurance companies to 51% and also to remove the cap within the next three years,” said Chan. “Regulators have granted approvals to several insurers and banks to enter China’s market.”

Chan also said foreign ownership to date has been more prevalent on the non-life insurance side.

“Between the life and non-life insurance sectors in China, the latter is relatively more open to foreign investors,” said Chan. “On the life side, the majority of the life insurance companies are joint ventures between domestic non-insurance enterprises with foreign insurance groups, but only a handful of them have foreign ownership of 5% or more. Despite an increasing affluence and expanding middle-income class in China, the protection gap remains quite wide. In AM Best’s opinion, China’s life insurance sector poses many opportunities for foreign capital.”

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AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.