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AM BestTV: Coronavirus Affecting China Economy, Earnings, Say AM Best Analysts
[February 12, 2020]

AM BestTV: Coronavirus Affecting China Economy, Earnings, Say AM Best Analysts


In this episode of AMBestTV, AM Best Asia-Pacific analysts Christie Lee, senior director, analytics, and James Chan, senior financial analyst, said the coronavirus outbreak is slowing China's economy, reducing insurance sales and impacting investment income. Click on http://www.ambest.com/v.asp?v=chinacoronavirus220 to view the entire program.

Lee addressed the potential impact of the virus on China's insurance industry.

"Overall, the earnings for the life and non-life insurance markets are expected to have profit weakening in 2020, especially in the first half due to low economic consumptions, slower new business growth and lower investment returns," said Lee. "However, the virus experience is likely going to improve the general public health risk awareness. In turn, this will benefit health insurance product sales in the long term. China is the second largest insurance market where the health insurance penetration rate is still very low. This means there is still a lot of potential in this market."

Chan discussed the direct effect of the outbreak on health insurers, in light of the central government of China announcing that they would help to shoulder the treatment costs for infected patients.

"AM Best's viewpoint is that the claims arising from the virus outbreak will have a relatively limited impact on Chinese insurers' underwriting profitability," said Chan. "Individual policyholders are unlikely to incur a significant amount of out-of-pocket expenses by themselves or would require claims on their private health covers."

To access a copy of this commentary, titled, "Wuhan Coronavirus Epidemic Impact on China Non-Life Insurance Market Likely to be Limited," please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=294121



Recent episodes of AMBestTV include:

  • Innovation Important, but Only One Element of Evaluation, Says AM Best Managing Director: At the St. Joseph's University's InsurTech Symposium in Philadelphia, PA, John Andre, managing director, AM Best, discusses the credit rating agency's approach to innovation, but added that rating evaluations also focus on items that include performance, business profile, risk management and capitalization: http://www.ambest.com/v.asp?v=andre220.
  • IFRS 17 Will Present a Clearer View of Insurers, Says AM Best Associate Director: Tony Silverman, associate director, AM Best, said the change to IFRS 17 accounting standards is not expected to have a near-term impact on insurers' credit ratings: http://www.ambest.com/v.asp?v=ifrs170120.
  • Interest Rates, Economy Drive Negative Outlook of Brazil's Reinsurance Sector, Says AM Best Senior Financial Analyst: Guy Simoes, senior financial analyst, AM Best, said that despite a negative market segment outlook, Brazil's reinsurers are still growing and operating in a relatively underpenetrated market: http://www.ambest.com/v.asp?v=brazilre120.

AM BestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at www.ambest.com/multimedia/ambtvsignup.html. View AM BestTV episodes at www.ambest.tv.


AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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