Survey finds Chinese insurers face shortage of risk management professionals

Chinese insurers lack sufficient risk management professionals and tools as they establish a framework to cope with the introduction of a new risk-oriented solvency system, an industry survey found on Tuesday.

In May and June the accounting firm PwC surveyed insurers on their views of the new mainland Chinese solvency supervision system that took effect this year. The 76 respondents accounted for 80 per cent of China’s insurance market with combined premiums of 1.9 trillion yuan (HK$2.3 trillion) in 2015.

The new solvency supervision system, known as C-ROSS, has been running in parallel to the former scale-oriented solvency system on a trial basis since 2015.

“The Chinese insurance industry needs at least four to five years to build up a comprehensive and effective risk management system,” said Jimi Zhou, a PwC consulting partner. “Chinese insurers are still at an early stage of risk management and are short of professionals in numbers and experience.”

He also said many insurers haven’t devoted enough resources and investment into beefing up their risk management capabilities, only seeing it for compliance purposes.

The insurance regulator is trying to spur insurers to improve their risk management through a solvency aligned risk management requirement and assessment, or SARMRA.