Shanghai, 31 March 2016 –In order to understand the market needs of China’s brokers and agents, with the assistance from Chubb Global Communications Research Services team, Chubb China conducted a market survey of agents and brokers in China. The response rate from intermediaries was robust.
The survey focused on considerations for choosing an insurer, market demand and intermediaries’ business priorities for 2017.
Considerations for choosing an insurer
When selecting a carrier, respondents consider claims handling the most important factor. Other leading factors they take into account when selecting a carrier include: capacity, terms and conditions and turnaround time for quotations.
As regards reasons for selecting a foreign insurer over a domestic insurer, the market pays most attention to superior underwriting expertise and global network capabilities. Fewer respondents would select a foreign insurer based solely on financial strength. This is probably due to the generally good financial strength ratings for foreign insurers in China.
The survey also indicates that foreign insurers have advantage over local ones in certain lines of business. These include: Commercial General Liability, Directors & Officers, Product-Completed Operations Liability and Professional Indemnity. For other lines such as property, construction, cargo and marine, foreign insurers are not perceived to have an obvious advantage over local insurers. There is an over-abundance of capacity in the market for Property and Marine and the perception, perhaps, among buyers is that these are commodity products. Nearly all P&C companies can write these lines of business and price is the main consideration. However for Casualty and Financial Lines, for example, where professional underwriting is necessary, foreign companies are perceived to have more experience in product design, underwriting, risk management and claims management.
As for current market needs, respondents see Commercial General Liability and Warranty & Indemnity Coverage as the most critical needs in the Chinese market today. These are followed by Overseas CEAR and Product-Completed Operations Liability. Cyber Coverage ranks 5th and is rising as a growing concern as insureds become more aware of cyber risk.
In a free response section of the survey, respondents provided a variety of specific insurance needs they feel are not being met in the market but would help them and their clients. Among these are the following: Credit/Guarantee Insurance, Performance Bond and Employer’s Liability. Other unmet insurance needs include: High-end Home Insurance, Competitive SME Office Package and High-end Personal Accident Insurance. Over one quarter (28%) indicate they currently do not have any unmet insurance needs.
Respondents mentioned a wide range of business priorities for 2017. The most mentioned were Overseas Projects (including construction and engineering), Contractor’s All Risk Insurance, Product Liability Insurance, Employer’s Liability Insurance and Professional Indemnity Insurance.
As the world’s largest publicly traded property and casualty insurer, Chubb is renowned for its underwriting excellence, superior claims handling expertise and global network. Our extensive product and service offerings can tailor insurance solutions for the specific needs of intermediaries and their clients. This survey helps Chubb China to better understand the needs and requirements of its intermediaries and clients in order to conceive, craft, and deliver better products and services going forward.
According to Kevin Bogardus, General Manager of Chubb China, “The survey provides us with invaluable information so that we can further improve our products and services, meeting the ever-changing needs of our intermediaries and clients. Our strong underwriting expertise in Casualty, Financial Lines and Construction, among others, coupled with our global network puts us in a unique position to best serve the requirements of our producers and clients. Chubb is also a leading insurer in providing specialized insurance solutions for many industry sectors, including life sciences, high tech, clean tech, information technology and entertainment. With this offering we believe Chubb China will become the first choice for intermediaries and clients when choosing their insurer. Having said this, this survey demonstrates that we are no complacent and we recognize that the market is changing as are the requirements of insurance buyers. We need to ensure that not only meet their needs but anticipate what will be needed for the future.”
This survey was conducted by contacting intermediaries in Beijing, Shanghai, Guangdong, Jiangsu and elsewhere in China. Nearly two thirds of respondents identified themselves as international brokers. Nearly half of the broker respondents serve companies with more than 300 employees.