The growth of China's life insurance industry slackened during its business transformation, while the non-life insurance sector achieved growth backed by policy support, Fitch said. In 4M25, premiums for life and non-life industries grew by 1% and 5% YoY, respectively.

In the ongoing low-rate environment, life insurers are shifting towards participating products with lower guaranteed rates to mitigate negative spread risk; however, this reduced the attractiveness of these products. After the acquisition cost controls were implemented in 3Q23, growth in bancassurance channels was expected to moderate in 2024. In 2H24, Chinese regulators tightened control over agent commission costs, which may dim the premium growth outlook for the insurance industry but may benefit margins.

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Despite tariffs and trade tensions posing challenges to the industry's growth prospects, government and insurance regulatory measures were projected to support demand for auto insurance and certain non-auto insurance products.