China’s non-life insurance sector was broadly stable in the first half of 2026, supported by a robust solvency buffer, modest premium growth and a steady underwriting margin, according to Fitch Ratings’ China Non-Life Insurance Monitor: August 2026 report.
Additionally, at the end of the first quarter of 2026, the sector’s comprehensive solvency ratio, measured by the China Risk-Oriented Solvency System (C-ROSS), stood at 243%, remaining well above the 100% regulatory minimum.
Overall non-life sector premium growth registered a modest 2.1% year on year in H1 2026, with varying performance across product lines.
Following the regulator’s ‘rate-policy alignment’ initiative, which seeks to curb aggressive pricing competition and manage commission and acquisition costs, underwriting profitability for major non-life insurers remained steady through Q1 2026.
Growth in motor insurance is projected by Fitch to remain subdued as new vehicle sales slow, even with broader consumption support and government vehicle trade-in incentives designed to boost demand.
Additionally, operating stability for non-life carriers continues to face significant risk from weather-related claims, particularly during the second half of 2026.
Although catastrophe losses were mild in 2025, insurers are anticipated to capitalize on soft reinsurance market conditions to bolster their catastrophe coverage. Data from Aon indicates that seasonal flooding in China resulted in total economic losses of USD21.5 billion in 2025.
In contrast, non-motor lines – including liability, accident and health insurance – outpaced the broader market with 3.9% yoy growth, and are likely to expand steadily, underpinned by low penetration, growing risk awareness and ongoing government policies.
Persistent low interest rates in 2026 drove non-life insurers to increase their equity allocations in pursuit of higher returns, even though their investment horizons are shorter than those of life insurers.
Nevertheless, fixed-income instruments should stay central to their investment portfolios to ensure sufficient cash flow for short-tailed liabilities. Meanwhile, allocations to bank deposits and fixed-income alternatives, including debt investment plans, saw a downturn in 2026.
Additionally, insurers’ investment returns remained constrained by low interest rates, given high allocation on bank deposits and shorter-term fixed-income type instruments, Fitch noted.
Looking ahead, Fitch expects “the launch of the ‘rate-policy alignment’ rules for non-motor insurance from November 2025 to enhance expense discipline, underwriting transparency, pricing adequacy, and overall market order.”
“However, premium growth among smaller insurers is likely to slow in the near term, as the new commission rules limit their ability to compete through elevated commissions and off-book expenses. We believe the sector will progressively shift from scale-driven expansion to more quality-focused growth, with an emphasis on risk-based pricing sophistication”
