C-ROSS a boon for in­sur­ance sec­tor

China Daily (Canada) - - SHANGHAI - By WU YIYAO in Shang­hai

wuyiyao@chi­nadaily.com.cn

The China Risk- Ori­ented Sol­vency Sys­tem (C-ROSS), which was im­ple­mented at the be­gin­ning of this year, has al­ready played a part in im­prov­ing the de­vel­op­ment of prod­uct of­fer­ings, the open­ing up of the mar­ket and trans­parency in China’s in­sur­ance mar­ket, said mar­ket play­ers and an­a­lysts.

C-ROSS, also known as China’s sec­ond gen­er­a­tion sol­vency reg­u­la­tion sys­tem, was one of the ma­jor top­ics at the June 12 to 13 Lu­ji­azui Fo­rum, an an­nual two- day meet­ing in Shang­hai. The sys­tem mea­sures the risks that in­sur­ance com­pa­nies un­der­take sci­en­tif­i­cally and com­pre­hen­sively, en­sures the sol­vency of China’s in­sur­ance industry while im­prov­ing its over­all com­pet­i­tive­ness and pro­motes risk man­age­ment abil­ity across the sec­tor.

Ac­cord­ing to the data from China In­sur­ance Reg­u­la­tory Commission, to­tal as­sets of China's in­sur­ance industry have more than dou­bled from 5 tril­lion yuan ($760 bil­lion) in 2010 to 12 tril­lion yuan in 2015, and the fast-ex­pand­ing mar­ket is ex­pected to grow fur­ther due to eco­nomic growth pat­tern shifts and na­tion­wide ur­ban­iza­tion.

Li Jinfu, vice chairman and gen­eral man­ager at China Taip­ing In­sur­ance Group Ltd, said that China’s in­sur­ers now have more say­ing in the global mar­ket as the new reg­u­la­tion brings about poli­cies and in­fra­struc­ture that en­able do­mes­tic and for­eign play­ers to co­op­er­ate, which in turn fa­cil­i­tates cap­i­tal ex­changes.

“The im­ple­men­ta­tion of C-ROSS is par­tic­u­larly ben­e­fi­cial to in­sur­ers which are aim­ing to ex­pand over­seas,” said Li.

C-ROSS will also help to im­prove the trans­parency of prod­uct of­fer­ings as the frame­work will push for­ward dis­clo­sure of prod­ucts and how they are traded, said Zeng Yu­jin, chairman of Shang­hai In­sur­ance Ex­change.

“As trad­ing data ac­cu­mu­lates and dis­clo­sures be­come more com­plete and ma­ture, reg­u­la­tors will be able to bet­ter mon­i­tor risk trends,” said Zeng.

Kai Zhang, pres­i­dent and CEO of Man­ulife-Sinochem, noted that C-ROSS also cre­ates op­por­tu­ni­ties for for­eign cap­i­tal in­sur­ers world­wide be­cause the mar­ket will nat­u­rally open up fur­ther as the reg­u­la­tion and man­age­ment of the over­all Chi­nese in­sur­ance industry reaches in­ter­na­tional stan­dards.

For­eign cap­i­tal in­sur­ers be­lieve that the open­ing up of China’s in­sur­ance mar­ket will help to bring more ben­e­fits to con­sumers and cor­po­ra­tions which re­quire pro­tec­tion from var­i­ous risks. Mark Tucker, CEO and pres­i­dent with AIA Group Ltd, likened the es­tab­lish­ment of an in­sur­ance com­pany to the world of foot­ball.

“New teams, play­ers and man­agers can now come into the foot­ball league and the whole sport is open­ing up. This helps to im­prove the gen­eral stan­dard of Chi­nese foot­ball,” said Tucker.

“We see this as a good thing and we hope that this will con­tinue,” said Tucker.

The im­ple­men­ta­tion of C-ROSS is par­tic­u­larly ben­e­fi­cial to in­sur­ers which are aim­ing to ex­pand over­seas.”

vice chairman and gen­eral man­ager at China Taip­ing In­sur­ance Group Ltd

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