CHINA INSURERS PREMIUM GROWTH SLOWS

Premium growth in China is slowing with tighter regulation, according to Fitch Ratings. The ratings agency said that more stringent regulation of insurance policy sales in China has resulted in a greater emphasis on risk protection and profit margins in Chinese life insurers' product mix, resulting in a slowing of premium growth. This trend is likely to continue following the introduction of new rules that require 20% of bancassurance sales to be in either protection type or long duration products from April 2014, and a crackdown on "high cash value" products that usually have negative margins for insurers, Fitch said. Chinese insurers solvency margins continue to be reliant on external funding, although proposed Solvency rules in China could motivate insurers to issue more equity-like hybrid securities to support their capitalization, it added.