Actuaries in China are witnessing one of the fastest-growing property and casualty markets in the world, fueled by the country’s economic growth, increasing urbanization, and, according to the 2024 China Property & Casualty Insurance Market Report, China’s P&C insurance market is expected to reach approximately USD $242 billion in gross written premiums (GWP) — about one-fourth that of the U.S. market — and is projected to grow at a compound annual growth rate (CAGR) of 7.1% through 2029.1 Major business lines include motor, property, liability and agriculture, and specialty lines. CAS members in China are on the frontlines and leading efforts to address this remarkable market growth.
On September 6, 2024, the picturesque Hangzhou Senbo Resort Hotel in Hangzhou, China, served as the perfect backdrop for the highly anticipated 2024 CAS China Insurance Summit, bringing together over 150 virtual and in-person participants. For the third consecutive year, the summit gathered a diverse array of professionals from the insurance and actuarial markets, fostering an environment of collaboration, learning and innovation. Both actuarial veterans and emerging professionals came to the Summit eager to share insights and learn about the latest trends affecting the market.
The event kicked off with welcome remarks from CAS President Frank Chang, who spoke of how actuaries can co-exist with artificial intelligence (AI) and gave tips on prompt engineering to get ChatGPT to perform better. Following Chang’s talk, speakers from Milliman and Deloitte shared experiences of training an internal GPT and provided an overview of the adoption of AI in the insurance industry.
Representatives from People’s Insurance Company of China (PICC), China Re and Munich Re shared their views on topics such as catastrophe models, climate change and credibility. Actuarial Service Partner Delvin Cai from PwC unveiled the latest research results on industry practices when implementing IFRS 17. Head of Actuarial Department Zhiran Han from China Pacific Insurance Company (CPIC) shared his firsthand experience in overcoming the challenges of implementation of the new accounting framework. A panel of chief actuaries from smaller insurers discussed their survival strategies and competitive methods.
One notable trend in China is the growth of the electric vehicle (EV) insurance market. Mike Chen, FCAS, head of the actuarial department at PingAn Insurance Company (one of the largest P&C carriers in the world) addressed this topic in his presentation titled “Insights of New Energy Vehicle Risk Characteristics.” He explained that in 2024, EV sales in China are projected to reach approximately 10 million units, accounting for about 45% of all car sales in the country. A significant challenge for EV insurance in China is the higher severity and cost of repairs. EVs generally feature more advanced and sensitive technology than internal combustion engine vehicles, resulting in greater repair expenses and longer repair times. Additionally, the structural weight of EVs increases the energy of an impact during collisions, potentially raising claim severity. The need for specialized technicians to handle battery and electronic component repairs also contributes to these costs. This market is experiencing significant innovation to address these needs, particularly regarding coverage for high-cost batteries, sensors and charging equipment that are critical to EVs.
In summary, as the landscape continuously evolves, gatherings like the CAS China Insurance Summit are vital for creating connections, sharing best practices and inspiring the next generation of actuaries. As the industry looks ahead, the lessons learned from this summit will continue to shape strategies and initiatives for P&C insurers, ensuring that the insurance community remains resilient and responsive to the needs of clients and stakeholders alike. ●