Outlook For China’s Insurance Sector Now Positive

Standard & Poor’s Ratings Services revised its outlook on China’s insurance sector to positive from developing to reflect expectations that the financial strength of the overall industry will improve over the medium term.

In a new publication titled “China Insurance Outlook 2006-2007”, Standard & Poor’s says factors such as improving operational fundamentals, strong potential growth, and regulatory commitment to policyholder interests are likely to offset challenges such as tough competition, a lack of talent, and weak capitalization.

“We found the outlook for the industry encouraging and expect premium growth to remain strong,” said Standard & Poor’s analyst Connie Wong.

Wong warned, however, that rapid expansion goes hand in hand with challenges and that weak capitalization or poor reserving practices could trigger instances of corporate failure, despite improvements across the wider industry.

The contents of “China Insurance Outlook 2006-2007” are available on RatingsDirect, Standard & Poor’s web-based credit analysis system (www.ratingsdirect.com).

To obtain a print or pdf version of the report or for information on how to subscribe to RatingsDirect, please contact Standard & Poor’s customer service desks.

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Source: Standard and Poor’s