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What does it mean to reopen the insurance industry?



The process of opening up the insurance industry is speeding up, from a loosening of shareholding to a liberalized business scope.

This reflects the fact that China's insurance industry has grown and expanded in the reform and opening-up process, and has released a signal that China's insurance industry will continue to mature in its reform and opening-up. On April 11, Yi Gang, the governor of the People's Bank of China, said at the Boao Forum for Asia's annual meeting in 2018 that the cap on foreign shareholding in future personal insurance companies would be eased to 51% and no longer set after three years. Allow qualified foreign investors to operate insurance agency business and insurance assessment business in China. To open up the scope of the insurance brokerage company, in line with Chinese-funded institutions.

Before the end of this year, the need for a two-year representative office for the full abolition of foreign insurance companies is required. This year is the 40 anniversary of the reform and opening-up, the introduction of a series of initiatives, including the opening of the insurance industry, to the world to highlight China's determination to open the door to build and share China's economic development dividend.

As an important part of China's financial industry, the opening of insurance industry has entered a new era. After decades of development, China's insurance industry has the foundation to further expand the opening.

The premium income rose from 1980 's 460 million yuan to 2017 's 3.66 trillion yuan, the increase exceeds 7,955 times times, the premium scale leaped the world second, the insurance total assets amounted to 16.9 trillion yuan, the insurance product system gradually consummates, the management main body Vigor unceasingly enhances, the service strength economy ability unceasingly enhances. China's economic strategic upgrade needs strong, mature insurance escort. This kind of attribute makes the insurance industry must have strong international competitiveness and mature risk management ability in the process of "going out" to cultivate international competitive power in the course of the implementation of "All the way" and the competition of participating in global trade and resource allocation. From the domestic perspective, the insurance industry also plays an important role in social security, major disaster compensation and financial reform and development.

How to perfect the second and third pillar of social security system, let common people (603883, share bar) and eat good "cake", is the important mission of insurance industry. At present, there are many weak links in the development of China's insurance industry. For example, by the end of 2017, China's insurance depth of 4.42%, insurance density of 2646 yuan, and the global average level is still a big gap. At the same time, the product supply and the needs of the people do not match, the protection of long-term business development, some of the insurance institutions are not real capital, solvency distortion, the use of funds there are many illegal violations.

These "Growing pains" are expected to be resolved gradually through further deepening of reform and opening up. The further opening up of the insurance industry will undoubtedly bring more challenges to the insurance market, but it will also inject new vigor into the development of the insurance industry and provide great impetus for our country to change from the big insurance country to the insurance power. Opening will allow the insurance market to further accept advanced concepts, technologies and products, and promote industry reform and development.

At the same time, this will help to change the insurance growth mode, promote the domestic insurance company to improve the management level, establish new business growth point. In the short run, the further opening-up of the insurance industry will not have a significant impact on the domestic market structure, but with the further relaxation of the shareholding ratio, foreign insurance companies will be more dynamic. The original 50:50 equity structure is expected to change, but only if the Chinese shareholders are willing to sell a portion of the equity. The newly established foreign-funded insurance company will have better corporate governance structure. In a more open and equal market environment, the Chinese and foreign insurance bodies compete with each other and complement each other.

In the future competition, the localization speed of foreign companies and the internationalization process of Chinese companies become an important aspect of competition.

Source: Security Daily 2018-04-13