Slower but positive growth

Although it was generally positive about the growth prospects of the Chinese property and casualty insurance market, rating agency Moody’s described itself as cautious about the capital adequacy of some Chinese non-life insurers. Moody’s, which has just released a report on the Chinese P&C market, cited Chinese insurers’ depressed capitalisation in 2008. The situation was made worse, Moody’s said by a difficult financial market which stalled a great many capital raising efforts and significantly reduced Chinese insurers’ investment income. At the same time, due to several catastrophes, it was also a difficult year for companies on the underwriting front. Moody’s said that these challenges highlighted the need for insurers to prudently manage their underwriting and investment strategies. However, Moody’s anticipates continued growth, albeit slower than in 2008, in China’s P&C industry. Moody’s said it was positive about the market’s growth prospects because of its still insurance low penetration rates and the country’s continued economic development which was supported by domestic consumption and public sector investments.