FEBRUARY 12, 2020 02:33 PM (EST)
AM BestTV: Coronavirus Affecting China Economy, Earnings, Say AM Best Analysts
FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 12, 2020 02:33 PM (EST)
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 .
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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.