P&C sector has a good outlook

China's P&C insurance risk outlook has been assessed as being low and only rises to intermediate for the life insurance sector, according to S&P Global Ratings. S&P's assessment mirrors China's moderate country risk, based on its view of the country's economic risk, political risk, financial system risk, payment culture and rule of law. In a statement, S&P said, “In our view, China's insurance sectors benefit from the country's robust economic growth potential. We expect China's economic growth to remain strong with real GDP growth of 6% or more annually through 2016-2018, however, the growth rate has been on a downward trend.” Referring to the Chinese P&C insurance sector, S&P outlined its reasons for its assessment of a low industry risk for the sector. “We view strong growth prospects and barriers to entry as positive factors, we consider the market's adequate ROE, product risk, and institutional framework as neutral factors. We expect the market to maintain good growth prospects and satisfactory earnings over the next two years.”