China’s insurance sector is expected to face financial headwinds following new US trade actions imposing steep tariffs on a range of Chinese exports.
The measures, announced on April 15, introduce duties as high as 245% on several categories of goods, prompting forecasts of higher claims costs and slowing premium growth for Chinese insurers, according to data and analytics firm GlobalData.
The tariffs target critical components of China’s export economy, including medical instruments, electric vehicles, lithium-ion batteries, semiconductors, and automotive parts. Industries reliant on these products may experience elevated production costs and operational delays, with repercussions likely to affect commercial and consumer insurance segments.
Manogna Vangari, insurance analyst at GlobalData, said the trade friction is contributing to economic instability, which may erode investment returns for insurers as financial markets respond to ongoing uncertainty.
“Insurers will experience a detrimental impact on their investment income due to the heightened economic uncertainty and volatility in the financial markets, spurred by escalating trade tensions,” she said.
GlobalData noted that economic spillover effects from the tariffs could place additional strain on life insurance sales, as consumer spending contracts under inflationary pressure and slower job growth. Simultaneously, the cost of doing business is expected to rise for manufacturers and logistics firms, increasing the likelihood of claims across multiple general insurance lines.
The general insurance loss ratio in China was 68.4% in 2024 and is projected to increase in the coming years. From 2025 to 2029, incurred losses are expected to grow at an average annual rate of 4.8%. Should tariff levels escalate or trade relations worsen, losses could exceed current estimates.
In response, Chinese regulators have encouraged greater domestic investment by institutional players. The National Financial Regulatory Administration (NFRA) has raised the ceiling on the proportion of insurance assets that can be allocated to equities.
This directive follows broader government measures aimed at injecting liquidity into the capital market, including increased equity purchases by mutual funds and pension plans.
Premium growth projections for China’s general insurance market have been revised downward. The sector is expected to expand by 4.6% in 2025 and 4.4% in 2026, compared to 5.4% in 2024. Total direct written premiums are forecast to increase from CNY1.7 trillion (US$245.8 billion) in 2025 to CNY2.2 trillion (US$306.9 billion) by 2029, with a compound annual growth rate of 5.4%.
The trade conflict has also affected the transportation and aviation sectors. On April 16, Beijing directed Chinese airlines to halt the acquisition of Boeing aircraft and suspend purchases of parts and aviation equipment from US companies.
These developments are expected to disrupt supply chains and raise the risk exposure of insurers offering marine cargo, trade credit, and political risk coverage.
A separate US measure banning advanced semiconductor exports used in AI systems is expected to affect vehicle production in China.
“This situation will exert a short-term influence on vehicle production, leading to increased prices for both new and used automobiles. Consequently, this escalation is likely to affect motor insurance premiums and claims,” Vangari said.
Shipping costs are also climbing amid rising port fees and broader geopolitical pressures, pushing up marine, aviation, and transit (MAT) insurance premiums. US actions to diminish Chinese influence in strategic zones, including the Panama Canal, are compounding costs for cargo operators and insurers alike.
To stabilise financial markets, China has mobilised its “national team” of state-linked investors.
Central Huijin Investment Ltd, a subsidiary of China’s sovereign wealth fund, announced readiness to deploy capital as needed. The People’s Bank of China has offered refinancing support to ensure sufficient liquidity for such interventions.
