US Tariffs Trigger Financial Strain on China’s Insurance Sector

China’s insurance sector is under growing pressure following the United States’ imposition of steep new tariffs on Chinese exports, a move expected to intensify financial risks across key insurance lines and slow premium growth.

According to GlobalData (a leading data and analytics company), General insurance growth is expected to decelerate, with expansion forecasted at 4.6% in 2025 and 4.4% in 2026, down from 5.4% in 2024. The sector’s profitability is expected to decline as loss ratios increase, with incurred losses projected to rise at a compound annual growth rate of 4.8% from 2025 to 2029.

Inflation, rising unemployment, and supply chain disruptions are also expected to weigh heavily on life insurance, motor insurance, and marine, aviation, and transit (MAT) lines. With vehicle production affected by restrictions on AI-related semiconductors and prices of new and used cars rising, motor insurance premiums and claim costs are likely to increase. Meanwhile, the aviation sector faces heightened risk exposure after China suspended purchases of Boeing jets and US aircraft components.

China’s trade routes are also under strain. Increased port call rates and geopolitical friction, especially around the Panama Canal, are pushing up MAT insurance premiums. Additionally, the government’s halt on key exports is expected to temporarily reduce demand for cargo and MAT insurance, while increasing claims related to business interruption and trade credit.

In response to the growing financial instability, the National Financial Regulatory Administration has eased investment restrictions for insurers and increased the proportion of insurance funds allowed in the stock market. These actions, supported by state-owned entities like Central Huijin Investment and liquidity measures from the People’s Bank of China, aim to stabilize capital markets and maintain insurance sector resilience.