...Faster Motor-Premiums Liberalisation May Spark Price War, Hurt Insurers' Profitability Fitch Ratings believes the profitability of Chinese motor insurers may be threatened by increased price competition if the regulator were to accelerate the pace at which motor- insurance pricing is liberalised. But we do not expect a trial deregulation of commercial-motor insurance pricing in six Chinese provinces that started in June 2015 to significantly undermine motor insurers' overall underwriting margin in the near term. Higher commission costs and a less favourable loss ratio due to rising auto-part prices and increases in labour and medical costs, have narrowed motor insurers' underwriting margin in the past two years. Fitch expects smaller insurers to consistently suffer underwriting deficits in their motor insurance portfolios in the near term, although some of them managed to reduce their absolute losses in 2014. Premiums Expansion Partly Driven by Alternative Distribution Channels Business...
