The sheer unpredictability of the coronavirus epidemic has our clients are asking how Covid-19 might affect China’s appetite for overseas business.

China, and Chinese production, is beginning to show signs of recovery and there is reason to believe that the challenges of this event will see China gain more ground in the world economy.

The 2002-2003 economic recovery from the SARS virus saw China make up the entirety of its short-term losses by quickly tapping strong consumer demand in the West. By contrast, China was relatively unaffected by the 2008 financial crisis, when global production and supply networks continued to function, enabling it to maintain rapid growth¹.

This time it seems that China is already beginning to return to normality, and in that it finds itself apparently some months ahead of the West. Its insurers are amongst the industries quickly getting back up to speed.

All Chinese insurers have seen their first quarter budgets take a huge hammering, but their relatively recent diversification into overseas business is now yielding an opportunity to help make up some lost ground, and Chinese capacity becomes more widely accepted internationally.

This is particularly the case for the Tier 2 companies who do not have such extensive domestic distribution networks, but who do have access to high value foreign revenues.

Overseas business accounts for less than 0.5% of total China insurance market premiums². We expect to see that rise quickly.

1. The Carnegie Asia Program
2. The China Banking and Insurance Regulatory Commission (CBIRC)