Cailian Press, November 1 (reported by Gao Ping) Following the implementation of “uniformity of filed and executed terms” for auto insurance and life insurance businesses, the same policy for non-auto insurance businesses officially took effect today.

“Our company has already studied and deployed measures to review and revise existing non-auto insurance products, as well as to communicate with clients and cooperation channels.” Recently, a relevant person from an insurance company revealed this information to Cailian Press.

Several insurance industry insiders told Cailian Press that while the new regulations may cause short-term disruptions for insurance companies, they are ultimately a significant long-term benefit. The rules will effectively curb the chaos of high-cost competition, shifting the focus in the non-auto insurance sector from a ‘cost war’ to a ‘value war,’ thereby stabilizing costs, improving profits, and making prices more transparent for consumers.

“Large insurance companies with economies of scale, diversified business lines, and mature underwriting frameworks are most likely to benefit from the new regulations. Small insurance companies with specialized positioning can still leverage their strengths by focusing on specific niche markets for professional pricing and providing customized products and differentiated services to sustain growth,” an insurance industry insider told Cailian Press.

System upgrades and pricing model enhancements: Insurers have been preparing intensively.

The core of ‘uniformity of filed and executed terms’ is that the terms and rates actually implemented by insurance companies must be consistent with the registered content. Several property insurance companies told Cailian Press that they had already begun related preparations.

A relevant person from a large insurance company revealed to Cailian Press that their company had already studied and deployed measures to review and revise existing products, as well as to communicate with clients and cooperation channels, ensuring smooth business transition. ‘The company will continue to optimize cost structures, enhance profitability, reduce risks associated with accounts receivable premiums and compliance issues, while promoting business transformation.’

Similarly, several large insurers also indicated that they had undertaken relevant preparations. PICC Property stated that at the corporate level, a special task force for non-auto insurance ‘uniformity of filed and executed terms’ was established. Meanwhile, a comprehensive review and systematic evaluation of existing non-auto insurance products and terms were conducted, initiating the renovation of commercial property insurance, employer liability insurance, and safety responsibility insurance products, as well as upgrading pricing models.

In addition, Ping An Property & Casualty Insurance also stated that it is advancing preparations such as clause registration and system upgrades to ensure full compliance when the new regulations take effect on November 1. In terms of performance evaluation, the weighting of premium scale, business growth rate, and market share will be reasonably reduced.

On October 10, the National Financial Regulatory Administration announced the ‘Notice on Strengthening the Supervision of Non-Auto Insurance Business’ (hereinafter referred to as the ‘Notice’), clarifying the comprehensive implementation of regulatory requirements such as ‘reporting and compliance’ and ‘issuing policies upon receipt of premium’ in the non-auto insurance sector. The Notice calls for optimizing assessment mechanisms, standardizing product development and usage, strengthening insurance rate management, and regulating premium income management. The Notice will take effect on November 1, 2025.

Reshaping Competitive Ecosystem: Large Insurers Expected to Benefit Significantly

Regarding the implementation of the new regulations, a representative from a large insurance company told Caixin that, in the long term, the implementation of the ‘reporting and compliance’ policy in the non-auto insurance sector will promote cost reduction and efficiency improvement within the industry, protect consumer rights, reduce cutthroat competition, and foster sound development of the overall property insurance industry, thereby better serving people’s livelihood protection and the real economy.

‘Premium prices will become more transparent, and the market will become cleaner.’ Regarding the impact of the new regulations on consumers, a non-life insurance company employee told Caixin during an interview.

For the industry, Wang Mengyuan, Senior Analyst at Fitch Ratings, told Caixin that stricter rate control (‘reporting and compliance’) in China’s non-auto insurance market will help optimize underwriting performance and encourage insurers to improve pricing capabilities and operational efficiency. ‘In the long run, improvements in the quality of non-auto insurance business will contribute more profits to the non-life insurance sector.’

‘The implementation and enforcement of the ‘reporting and compliance’ regulatory policy in the non-auto insurance sector will help the industry return to its core function of insurance, enabling market participants to assess risks more accurately, provide risk mitigation services, and leverage insurance’s dual functions as a stabilizer and promoter.’ A representative from a large insurance company also noted that this will guide the industry back to its fundamental role, encouraging market players to compete more rationally, effectively curb violations, set rates reasonably, lower expense ratios and accounts receivable ratios, enhance underwriting capacity in the non-auto insurance sector, provide better risk management services, and reduce the risk of unpaid premiums in the industry.

Yang Fan, General Manager of Beijing Paipaiwang Insurance Agency Co., Ltd., told Caixin in an interview that, from an industry perspective, the new policy is a key step in promoting high-quality development in the non-auto insurance market. It will reshape the competitive ecosystem by accelerating the elimination of companies with loose management and reliance on distorted expenses, creating a fair environment for well-managed firms. More importantly, the policy will drive the transformation and upgrading of the entire value chain, pushing sales channels to shift from pure price competition to providing professional risk consulting and services, thereby enhancing the professional value of the entire industry. In the long run, a regulated, transparent, and value-driven industry ecosystem will be better able to play its role as a social ‘stabilizer’ and achieve sustainable and healthy development.

Non-auto insurance business refers to all other property insurance businesses outside motor vehicle insurance. In recent years, non-auto insurance business has experienced sustained and rapid growth, with its share in total property insurance premiums rising from 39% in 2020 to 46% in 2024. Data shows that in the first eight months of this year, property insurers’ total premium income reached RMB 1.22 trillion, a year-on-year increase of 4.7%. Of this, non-auto insurance business revenue was RMB 619.5 billion, accounting for 50.8%.

However, during the development process, in order to capture market share, there have been instances of intense ‘price wars’ driven by high sales expenses, leading to persistently high comprehensive costs in the non-auto insurance sector.

‘The comprehensive cost ratio of non-auto insurance business has consistently been higher than that of auto insurance, and even large insurers face pressure in achieving underwriting profitability. The comprehensive cost ratio of non-auto insurance business for leading insurers in 2024 ranged between 99% and 102%,’ Wang Mengyuan stated.

Wang Mengyuan told reporters from Cailian News that large insurance companies with economies of scale, diversified business lines, and mature underwriting structures are most likely to benefit from the new regulations. Their strong distribution capabilities reduce reliance on intermediary channels, enabling them to achieve compliant underwriting at lower rate levels. Extensive underwriting and claims data support more precise risk selection and technical pricing. As commission-driven competition gradually fades, pricing capability will become the main competitive focus.

An insider from a large insurance company also stated that the implementation of the ‘rate-filing consistency’ policy for non-auto insurance will help the company leverage its advantages in areas such as brand, scale, service network, risk pricing, sales channels, claims handling ability, risk mitigation, data foundation, and professional talent. This will enhance underwriting pricing capabilities, optimize claims service levels, further strengthen market competitiveness, and improve operational performance.

Shift in Competition Focus in the Non-Auto Insurance Market: How Can Small and Medium-Sized Insurers Break Through?

Under the new ‘rate-filing consistency’ regulations for non-auto insurance, industry insiders widely believe that large companies will benefit significantly, while smaller firms may face pressure in the short term. Wang Mengyuan believes that stricter rate control (‘rate-filing consistency’) in China’s non-auto insurance market will help optimize underwriting performance and encourage insurers to improve pricing capabilities and operational efficiency. However, she expects that premium growth for small insurance companies will slow down in the short term.

“Since ‘rate-filing consistency’ erodes incentives for intermediary channels, smaller insurance companies with weaker pricing capabilities may experience a noticeable slowdown in growth.” Wang Mengyuan explained that insurers relying on high fees to secure business are expected to lose market share—when product differentiation is not significant or superior services are absent, distributors and customers tend to favor insurers with stronger brand power. “Nevertheless, small insurance companies with specialized positioning can still leverage their strengths by focusing on specific niche markets for professional pricing and offering customized products and differentiated services to sustain growth.”

“The focus of competition in the non-auto insurance market will shift from fee-driven business expansion to risk-based rational pricing and prudent underwriting.” Wang Mengyuan anticipates that insurers will prioritize technical pricing and data analysis capabilities to enhance pricing competencies and improve service quality. A stricter rate-filing mechanism is expected to improve premium adequacy, further boost profitability in non-auto insurance businesses, and stabilize combined ratios.

Yang Fan also stated in an interview with Cailian News that the new policy poses a severe challenge for business model transformation. Companies accustomed to cost-driven growth must quickly pivot to relying on product innovation, precise pricing, and high-quality service to win the market. Therefore, insurers should focus on building core competencies while deepening collaboration with professional intermediaries by providing more specialized training and system support to jointly serve customers and create shared value.

Yang Fan noted that, for consumers, the new policy means insurance consumption will become more transparent, rational, and reassuring. By squeezing out unreasonable cost spaces, consumers will be exposed to more realistic premium prices and avoid information asymmetry. When price wars are curbed, the focus of competition among insurers will naturally shift toward improving claims efficiency and customer service experience, allowing consumers to enjoy better services. Meanwhile, the market will guide insurers to develop more diversified and personalized protection products, enabling consumers to purchase insurance that better fits their needs rather than homogeneous offerings.