On April 15, 2025, the US government imposed steep tariffs—reaching up to 245%—on Chinese imports, triggering significant concerns for China's insurance industry. The affected product categories include syringes and needles (245%), lithium-ion batteries (173%), electric vehicles (148%), car wheels (73%), and semiconductors (70%).
The Us government’s newly imposed tariffs are expected to ripple across multiple sectors, driving up claim costs and threatening the profitability of Chinese insurers in 2025.
Key industries—semiconductors, medical equipment, manufacturing, aviation, and automobiles—are set to face disruptions, leading to inflated costs, slower economic growth, and higher unemployment.
These economic shifts will likely dampen life insurance demand, increase premium rates, and squeeze insurer margins.
Experts warn of a decline in insurers’ investment income, citing growing financial market volatility and economic uncertainty due to the intensifying trade dispute.
In response, China's National Financial Regulatory Administration has raised the allocation of insurance funds toward equity markets—a strategic move to inject institutional capital and stabilize financial performance.
The general insurance loss ratio, which stood at 68.4% in 2024, is projected to rise in 2025–26. Incurred losses are expected to grow at a CAGR of 4.8% from 2025 to 2029, though escalating tariffs could push actual losses even higher.
China’s general insurance sector, valued at Chinese yuan renminbi 1.7 trillion ($245.8 billion) in 2025, is forecast to grow at a slower pace—4.6% in 2025 and 4.4% in 2026—compared to 5.4% in 2024.
Over the 2025–2029 period, the industry is expected to reach Chinese yuan renminbi 2.2 trillion ($306.9 billion) in direct written premiums, registering a CAGR of 5.4%.
Ms. S Mohini Ratna - Editor VARINDIA
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