foreign insurers had been lobbying for access to the third-party indebtedness car indemnity market, arguing that being kept away from that business was a major handicap because most car-owners buy both commercial and compulsory policy policies from the lapp insurance company. The fully opening up would likely attract more extraneous non-life insurers to the grocery store, although any impact on the dominant local players would likely be limited, given their huge sales network, analysts said. China ’ mho country council, or the cabinet, published the revised car indemnity rules, which took consequence on May 1, on the government ’ s web site on Monday. official papers reported on Wednesday that the be active had efficaciously opened up China ’ s third-party liability car indemnity market to foreign players. The announcement comes as U.S. and chinese leaders are due to start the Strategic and Economic Dialogue on Thursday in Beijing.
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China has long promised to open its compulsory car indemnity market. During his February visit to the United States, taiwanese Vice President Xi Jinping vowed to give foreign access to this market .
taiwanese insurers, such as PICC Property and Casualty Co and Ping An indemnity, have dominated the indemnity business in China by leveraging their huge army of salesperson and geographic compass. There are presently 21 foreign insurers operating in China, including Tokio Marine & Nichido Fire Insurance Co, Chubb Corp and RSA Insurance Group, but they own just 1 percentage of China ’ s 477.9 billion yuan ( $ 75.73 billion ) non-life indemnity commercialize. “ With the principle changes, some foreign insurers are expected to start making strategic investments in this area, possibly through acquisitions because car insurance is besides big of a grocery store to ignore for a non-life musician, ” said Li Cong, analyst at Changjiang Securities Co. He added that smaller chinese players could feel the heat of competition from foreign players, but acme local players such as PICC and Ping An will continue to dominate the market.
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car indemnity is a major dowry of China ’ s non-life policy, consisting of mandatary third-party liability insurance and commercial policy. The mandatary insurance policies were introduced five years ago, in line with like practices used in other countries such as the United States and Japan. Every car-owner must sign up for a third-party liability insurance and most much choose to join commercial insurance policies vitamin a well to cover any damages to their own vehicles or other needs. ( $ 1 = 6.3102 Chinese yuan ) ( Editing by Muralikumar Anantharaman )