Motor insurance reform in China: a win-win

The scope of the recently launched motor sector reform in China is unprecedented and will benefit insureds and insurers alike.

Key takeaways

  • China's motor sector reforms include an increase in compulsory and voluntary coverage limits, lower rates and more dynamic pricing.
  • The changes will likely lead to near-term pricing volatility.
  • We also forecast a 5% contraction in motor premium volumes in real terms in 2021 as new base rates and risk loading factors phase in.
  • However, we see a swift return to 3% premium trend growth in real terms in 2022.
  • In the longer term, consumers will benefit from lower prices, more choice and better protection.
  • With more dynamic pricing, insurers will develop more varied revenue streams from new products such as electric vehicle and usagebased and telematics insurance.

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Economic Insights Motor insurance reform in China: a win-win

China's motor insurance reforms: a global view

China has launched the largest reforms to motor insurance since 2003. We analyse major advanced markets to explore the expected impact on China's insurers.


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