China’s non-motor insurers to gain from tighter commission rules

However, the move is expected to slow premium growth amongst small insurers.

Fitch Ratings said tighter commission controls in China’s non-motor insurance market will support underwriting performance and push insurers to improve pricing sophistication and operational efficiency. 

However, the move is expected to slow premium growth amongst smaller insurers in the near term, whilst higher-margin non-motor lines will contribute more to sector profitability over time.

Non-motor lines have been the main growth driver for China’s non-life insurance sector in recent years. 

Their share of total premiums rose from 39% in 2020 to 46% in 2024, and further to 51% by August 2025. 

Despite this growth, underwriting profitability has remained weak, with the combined ratio of non-motor lines consistently higher than motor lines. 

Amongst major insurers, the non-motor combined ratio ranged from 99% to 102% in 2024.

Fitch expects competition in the non-motor segment to shift from commission-driven sales to risk-based pricing and disciplined underwriting following new regulatory measures. 

The National Financial Regulatory Administration issued a notice in October 2025 requiring insurers to strengthen commission management, prioritise profitability and ensure consistency between statutory filings and actual underwriting practices. 

The new rules take effect on 1 November.

Larger insurers with scale, diversified portfolios and strong underwriting frameworks are expected to benefit most.

Their established distribution networks and reliance on data-driven risk assessment will help them maintain compliance and profitability under lower commission structures.

By contrast, smaller insurers that depend heavily on intermediaries and high commissions are expected to see slower growth. 

Fitch said these companies could lose market share as distributors and customers gravitate toward stronger brands with better risk management and service quality. 

Still, smaller players with specialised expertise may sustain growth by focusing on niche segments with tailored products and pricing.

Fitch noted that China’s past experience in motor and life insurance shows that tighter commission oversight can improve underwriting results, even if it temporarily slows growth.

However, applying these rules to non-standardised non-motor products will be more complex due to product diversity, opaque expense structures and rapid innovation, with progress likely varying by product type and regulatory environment.