How Chinese Marine Insurance“Escape Danger”Against Market Tendency

According to relevant information, the global marine insurance market has been in loss for 20 consecutive years by 2015. China became the world’s largest freight insurance market in 2014,accounting for 9.2% of the market share, and the freight insurance premium was once going high. The current situation is that Chinese marine insurance has been making little profit over the last two years.

Looking back over the past few years, Chinese marine insurance industry has formulated some new measures on system innovation, kept in line with the international rules and optimized the development environment. So,with the scale of Chinese marine insurance market expanding, and the marine insurance service system construction completing,under the background of both the global insurance amount and rate are in the downfall, can Chinese marine insurance keep its integrity?

The Secretary General of Shanghai Institute of Marine Insurance Xu Feng said, due to the influence of severe situation of international shipping industry and trade,similar to the global counterparts, the accumulated risk of decline for current Chinese marine insurance market is increasing. With various capitals, especially the bulk capital swarming into the market, the severe surplus of insurance capability is the main reason for the weakness of the global marine insurance market. The main reason of various capital swarming into the market is“low interest rate”. The issues of low interest rate and China’s economic impact on the international marine insurance have been put forward by IUMI in its Berlin conferencelast year. The conference believed that China’s economy slowdown and economic structure transformation had a profound impact on the development of global freight insurance. The different level of price decline for energy,minerals, agricultural products became one of the main factors for the reduction of the income of global freight insurance.

At present, there are more than 60 insurance companies engaging in marine insurance business in China, and more than 100 professional broker institutes doing marine insurance. China Life, CPIC, Ping An and other 10 professional marine insurance operation centers have been established in Shanghai. Other agencies like maritime arbitration, freight trading, shipping consultancy are also gathering gradually in Shanghai.

A fact that cannot be ignored is that more than 70% of Chinese shipping companies have their insurance in foreign insurance agencies, the marine insurance only accounted for 10% of the global market share. Compared with the western countries where the marine insurance is developed, China is still lagging far behind. So, what is the development direction for Chinese marine insurance?Xu Feng said that first of all, we should make efforts on personnel training. The marine insurance talent should be compound talent and this cannot be produced overnight.Taking insurance assessor as an example, in addition to professional quality, they should be good at insurance knowledge, insurance theory and practice skills, insurance rules, they should understand relevant industrial policy,economy, law, financial and accounting knowledge, be good at professional technology such as international trade, shipping, navigation, logistics, machinery,engineering, product processing, and have a good ability of communication, coordination and writing.