Rule changes in China around foreign ownership are aimed at fostering “national champions” rather than benefitting international insurance companies, GlobalData says.

The consultancy says Allianz is set to become one of the first foreign insurers to run a fully owned operation in China under Allianz (China) Insurance Holding Co after pursuing 100% ownership of the insurance entity since December 2019, when the Chinese Banking and Insurance Regulator lifted a 51% cap on foreign insurers ownership in Chinese operating insurers.

Analyst Jazmin Chong says the abolished rule does level the regulatory playing field for foreign entries, though they are not the targeted beneficiary.

“That lifting of capped ownership is aimed at benefiting Chinese firms rather than foreign ones,” Ms Chong said.

The Chinese government is expecting foreign insurance players will push domestic insurers to “learn from global best practices, fostering better corporate governance, risk pricing, and investment management,” she says.

Foreign insurers that wish to follow in Allianz’s footsteps should “take a holistic approach to this market space, challenging Chinese insurers on company best practices rather than diverting efforts and investment to target market share and gross written premiums as a benchmark for growth”.

China is set to become the world’s largest global insurance market. GlobalData’s analysis reveals China’s gross written premium is forecast to reach $US259.97 billion ($332.94 billion) in 2024, from $US195.65 billion ($250.57 billion) last year.