Lloyd’s has urged brokers to target the expanding Chinese non-life market.
In a report this week, Lloyd’s said that increasing the size of the broker market was necessary to raise general risk awareness in the country.
Currently, only 1% of China’s GDP is spent on insurance products – but the non-life market is estimated to be worth $35bn (£16.9bn) by the end of 2007.
International brokers are already gaining increased access to the market, currently accounting for 28% of the top 10 brokers operating there.
“A strong broker market is a vital component in improving customer awareness of insurance. There is room for further growth, however,” the report said.
“While brokers still control less than 2% of the total market, their share of the commercial market has grown to over 20%.”
The report, China – Avenues for Growth, noted that the international brokers had been extremely valuable in linking Chinese insurers with international reinsurance markets.
A lack of risk awareness was coupled to the fact that insurance was not a commonly purchased product in China, it said.
And underinsurance was common even in the commercial sector.
Lloyd’s China, a subsidiary of the Lloyd’s corporation, began operations in April this year, allowing Lloyd’s syndicates to access the Chinese reinsurance market.
It currently comprises 11 underwriting divisions.
