China Report: A Systemic View of the Insurance Industry and Sustainable Development

The contribution of the insurance industry to sustainable development relates to its three roles as a financial loss “shock absorber” in reducing real risks to assets, in safety and health, and as a significant investor in the real economy. Particular areas where the insurance industry is responding to sustainable development challenges are in relation to natural disasters, financial inclusion, aging populations, and the insurance and investment needs of the green economy.

China is the world’s fastest-growing insurance market, and it faces key sustainability challenges related to environmental damage and an aging population. In relation to insurance, the key focus has been on environmental pollution liability insurance. But there is also broader potential to harness insurers as risk managers, risk carriers and investors in relation to the green economy, and to learn from and contribute to international regulatory practices. Policy proposals include:

• Improving the insurability of environmental pollution liability risks by strengthening regulations.
• Reassessing the current environmental pollution liability insurance scheme through a comprehensive consultation process.
• Expanding the definition and scope of green insurance beyond environmental pollution liability insurance to other areas where it could address environmental risks and liabilities, and promoting environmental sustainability.
• Participating in international sustainable insurance initiatives and promoting sustainable development in global insurance regulatory frameworks.