China approves new insurance ventures from BNP Paribas and Prudential
- August 6, 2025
- Posted by: Kassandra Jimenez-Sanchez
- Category: Insurance
China is further opening its massive insurance market by approving the establishment of separate insurance units for BNP Paribas and Prudential Financial.
The National Financial Regulatory Administration (NFRA) greenlit a BNP Paribas joint venture with Volkswagen Financial Services, according to NFRA head Li Yunze.
US-based Prudential Financial has also received approval for an insurance asset management firm in Beijing.
“Next, we will support Beijing’s financial opening up as always,” Li added.
China’s securities regulatory authority also extended an invitation to foreign institutions encouraging them to engage in investment and business activities within the country.
In China, insurance has emerged as a rapidly expanding financial sector, with total assets reaching a staggering $4.2 trillion by the end of 2023.
This remarkable figure places China as the second-largest insurance market globally, trailing only behind the United States.
In recent years, large Chinese insurers have raised funds by issuing capital supplementary bonds in the domestic debt market at favourable rates.
This credit-positive move is expected to make investors confident and risk appetite to grow as the capital market expands.
The aforementioned factors have prompted credit rating agency AM Best to maintain a stable outlook for the non-life insurance industry in China.
A decision that has also been influenced by several contributing elements, including a supportive regulatory environment, heightened awareness of health insurance, and substantial growth potential in the electric vehicle insurance market.
The opening of the Chinese insurance market will also benefit life insurers. Chinese companies have had fewer opportunities for foreign investments, which puts additional pressure on their returns, as Swiss Re reported in July 2024.
Since 2020, investment yields in China’s life insurance sector have fallen by over 300 basis points, analysts noted.
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