Kathmandu. Tightening commission rules in China’s non-motor insurance market is expected to boost underwriting performance. This will motivate insurance companies to improve pricing sophistication and operational efficiency.
According to Fitch Ratings, stricter commission rules will allow high-margin non-motor lines to contribute more to the sector’s profits over time. “However, this is expected to slow premium growth at smaller insurers in the near future,” Fitch said.
In recent years, non-motorized lines have been the main growth car for China’s non-life insurance sector. Its share in total premiums has increased from 39% in 2020 to 46% in 2024 and 51% by August 2025.
Despite this growth, underwriting profits remain weak, with a combined ratio of non-motor lines consistently higher than motor lines, Fitch said. “Among major insurers, the non-motor combined ratio in 2024 was between 99% and 102%,” Fitch said.
Fitch expects the non-motor sector to shift from commission-based sales to risk-based pricing and disciplined underwriting, following the new regulatory measures.
The National Financial Regulatory Administration issued a notice in October 2025. “Insurers need to strengthen commission management, prioritize profitability, and ensure consistency between statutory filings and actual underwriting practices,” it said.
The new rules will come into effect on November 1. Large insurance companies with large diversified portfolios and strong underwriting structures are expected to benefit the most. Their established distribution network and reliance on data-based risk assessments will help them maintain compliance and profitability under low commission structures, Fitch said.
In contrast, smaller insurers, which rely heavily on intermediaries and high commissions, are expected to experience slower growth. “Distributors and customers are more likely to lose market share as they gravitate toward stronger brands with better risk management and service quality,” Fitch said. ’
Still, smaller players with specialized expertise can sustain growth by focusing on specific segments with customized products and pricing. “China’s past experience in motor and life insurance shows that tighter commission monitoring can improve underwriting results,” Fitch noted, “if it temporarily slows growth.” ’
However, it will be more complicated to apply these regulations to non-standardized non-motor products due to product diversity, unclear spending structures, and rapid innovation. Progress is likely to vary depending on the type of product and regulatory environment.
