China is set to become the largest global insurance market, attracting foreign insurers to invest in the country. However, despite opening up its economy, domestic champions are set to benefit from any foreign competition, says GlobalData, a leading data and analytics company.

An analysis of GlobalData’s Global Insurance Database reveals that China’s GWP, which stood at US$195.65bn in 2020, is forecasted to reach US$259.97bn in 2024.

Reportedly, Allianz Group is now set to become one of the first foreign insurers to run a fully owned operation in China under Allianz (China) Insurance Holding Co. The company has been aggressively pursuing 100% ownership of the insurance entity since December 2019, when the Chinese Banking and Insurance Regulator lifted a 51% cap on foreign insurers ownership in Chinese operating insurers.

Jazmin Chong, Insurance Analyst at GlobalData, comments: “While the abolished rule levels the regulatory playing field for foreign entries, it is important to recognize that lifting of caped ownership is aimed at benefiting Chinese firms rather than foreign ones.

“China’s strategy of opening its market to foreign players is part of the country’s wider economic efforts to bridge the gap between international competing firms and China. China is also expecting that foreign insurers will push domestic insurers to learn from global best practices, fostering better corporate governance, risk pricing, and investment management.

“As China continues to foster national champions, foreign insurers that wish to follow Allianz foot steps should take a holistic approach to this market space, challenging Chinese insurers on company best practices rather than diverting efforts and investment to target market shares and gross written premiums, as a benchmark for growth.”