Importance of China auto insurance industry
On an average, premiums of China auto insurance industry amounts to over 60 percent of aggregate premiums of insurance industry of China. China automobile insurance industry is a major contributor in non life insurance segment. From 2000 to 2007 premiums of automobile insurance industry of China have amounted to 70 percent of total premiums paid in China insurance sector. It is also regarded as having best rate of growth among all insurance industries of China.
China auto insurance laws
Car owners in China are bound by law to get an auto insurance policy. This law was introduced in July 2006. This law has provided automobile insurance market in China with a much needed shot in arm. It is being assumed that in 2015 more cars would be sold in China than in United States of America. This is supposed to be a good sign for auto insurance industry of China as that would mean that more auto insurance policies would be sold in China at that particular point of time.
China auto insurance market
Allianz, which is a major insurance services provider of world, has been a marquee name in China auto insurance market. It has among first few companies, from outside China, to have ventured into property insurance market of China which has been growing at a steady rate.
As per regulations of China auto insurance market, any auto insurance services provider, which is funded by overseas business enterprises, has to have a minimum of 20 million yuan in registered capital in order to open a branch in China. China Insurance Regulatory Commission requires a minimum of 200 million yuan in order for an overseas auto insurance services provider to establish a new branch in China.
China Insurance Regulatory Commission has put in a provision, which states that overseas auto insurance services providers can transform their branches into subsidiaries that are fully owned. However, this facility would only be provided in instances where that particular branch has operated, for a period of one year, in accordance to laws set by China Insurance Regulatory Commission.
First in this line was a branch of Ming An Insurance Company Limited of Hong Kong. It was set up at Shenzhen. A number of non life insurance companies have benefitted greatly from China auto insurance policies. One example is Huatai Insurance Co, which generates 70 percent of its income from these policies.