China is poised to become the world’s second-largest reinsurance market within the next decade, a development that is drawing increased attention and investment from global reinsurers, including Paris-based SCOR, according to the company’s CEO, Thierry Leger.
In an interview, Leger expressed optimism about the Chinese market’s potential, noting that it could also become SCOR’s second-largest market due to its “incredible growth potential”.
Reinsurance is seeing a rising demand in China, fueled by robust economic growth forecasts and a significant insurance protection gap.
Leger pointed to several factors that will drive this growth: China’s aging population is likely to increase the demand for life and health insurance products; the expanding industrial sector may require more property coverage; and the effects of climate change are expected to boost the need for natural disaster insurance.
Over the next 10 to 20 years, China is expected to contribute between 10% to 15% to SCOR’s overall business, with revenue from insurance premiums in the country potentially doubling or tripling.
“I’m convinced that the Chinese reinsurance market will become No 2 in the world in the next 10 years,” Leger said.
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In line with these projections, SCOR plans significant investments under its “Forward 2026” strategic plan, particularly in modeling and underwriting cyberspace risks, which are increasing rapidly in China.
The company also plans to significantly enhance its investments in China’s capital markets, currently valued at around $1 billion, to capitalize on long-term growth opportunities.
Leger also addressed skepticism regarding China’s economic prospects, strongly disagreeing with the notion that China’s economic development has peaked. He highlighted areas with untapped potential, such as bridging the consumer spending gap between Chinese and Western consumers and advancing digital transformation.
Leger also emphasized the importance of maintaining strong bilateral ties, noting that “in a world full of geopolitical tensions and wars, it’s very important to send signals that show people that there are long-term relationships and that there is a long-term view of peace and collaboration between (the two) countries.”
The SCOR CEO also commended China’s gradual financial opening, which he said has fostered a high level of confidence. He underscored the importance of continuing to develop a stable regulatory environment to attract and retain foreign investors.
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