INSURANCE | Staff Reporter, China

Chinese insurers hinge on digitisation to boost competitiveness

But upfront investments may undermine near-term performance.

Technological innovation and rising e-commerce will continuously reshape the market dynamics of the Chinese insurance sector, a Fitch Rating report said, with insurers expected to be more agile in deploying new tech to strengthen their competitiveness over the long-term.

New product development will highly hinge on the degree of integration between digital technology and insurance practices, and insurers are expected to apply big data and artificial intelligence to build products.

However, upfront tech investments may undermine near-term performance despite the favourable growth prospects of digital insurance, Fitch warned.

Insurers also will become more proactive in partnering with third-party internet platforms to expand their market coverage.

Regulators may introduce additional measures to govern emerging risks associated with business conducted through digital platforms if they expect the risks to jeopardise insurers' financial soundness or undermine consumers' interests, the report concluded.

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