Cong Lin, Vice Administrator of the National Administration of Financial Regulation (NAFR), stated at the Insurance Session of the 2026 Financial Street Forum Annual Conference on October 20 that the insurance sector should proactively shoulder the missions entrusted by the new era, precisely target key areas and weak links of national strategies, and further function as an economic “shock absorber” and social “stabilizer”.

First, the sector should fully support the development of new-quality productive forces. Cong Lin proposed to accelerate the establishment of a full-chain and full-cycle insurance product and service system centering on scientific and technological innovation, green transition and the “Six Networks” initiative.

She elaborated that authorities should expand the coverage of tech insurance, green insurance, liability insurance and related lines of business, optimize the compensation mechanism for first-of-a-kind products and first-edition technologies, and improve risk diversification models for tech insurance. The insurance sector should leverage its role in stabilizing expectations by rolling out tailored insurance products for consumption to boost and expand domestic demand. Capital from insurers, known as patient capital, can be channeled via financial instruments such as equity investment, debt investment plans and asset securitization to provide more long-term funding support for major national strategies, new infrastructure and strategic emerging industries.

Second, the industry should continuously underpin people’s well-being and social governance. She noted that insurers should actively integrate into the development of a multi-tiered, multi-pillar social security system and vigorously develop commercial endowment insurance, health insurance and long-term care insurance. They should expand inclusive insurance coverage to meet protection needs of new citizens, flexible workers, low-income groups and small and medium-sized enterprises. The catastrophe insurance system will be steadily refined to raise the share of commercial insurance compensation in total losses caused by major disasters.

Third, the insurance sector shall serve high-standard opening-up. She held that guided by the goals of stabilizing foreign trade and foreign investment, China should vigorously develop export credit insurance. To serve the broader national opening-up strategy, a global cross-border insurance service system should be built to safeguard the legitimate overseas interests of Chinese enterprises. Efforts will be accelerated to develop Shanghai into an international reinsurance hub and raise China’s voice in the global marine insurance market.

Against the backdrop of socioeconomic development requirements and the goal of building a strong financial nation, the insurance industry must keep improving its adaptability and competitiveness. Cong Lin stressed that the sector must abandon the obsession with scale, shift the development focus from speed and volume to quality and efficiency, deepen reform continuously, enhance the suitability of insurance supply, and pursue high-quality industrial development.

Specifically, large insurance institutions, as the main force serving the real economy, should align themselves with national strategies and lead high-quality development of the whole sector. Small and medium-sized insurers should streamline business and improve quality, explore distinctive and specialized business models rooted in local markets, and firmly curb irrational competition such as expense wars and illegal commission rebates.

Digital transformation also needs to be accelerated. Artificial intelligence and other technologies should be deeply embedded in underwriting, claim settlement and other insurance workflows. The industry’s data governance framework will be improved with unified data standards to consolidate the data foundation. Cross-sector sharing of risk data with healthcare, agriculture, technology, transportation and other sectors will be explored jointly to lift overall risk management capacity.

The 15th Five-Year Plan period marks a critical stage for the insurance industry to undergo a profound shift from high-speed growth to high-quality development. Cong Lin warned that close vigilance is required against spread loss risks in the life insurance sector amid a prolonged low-interest-rate environment. Insurers need to optimize liability structure and costs, phase out high-cost in-force policies in an orderly manner and strengthen cross-cycle operational capacity. Asset-liability linkage management will be reinforced, alongside improved interest rate transmission and liability cost adjustment mechanisms to underpin sound operations. Risks on the asset side will be closely monitored, asset allocation structures optimized and liquidity risk controls tightened to guarantee the capacity for insurance payouts. New types of risks arising from new business forms will be tracked closely, and reputation risk management will be strengthened.

Source: Shanghai Securities News