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Moody's Sees Stable Future For P&C Industry

MOODY'S Investors Service predicts a stable future for the Chinese property and casualty insurance industry, despite the economic downturn, increased price competition and a drop in capitalization.

The ratings agency yesterday said the challenges highlight the need for insurers to prudently manage their underwriting and investment strategies.

"Moody's stable outlook on the Chinese P&C industry reflects our expectation that improving underwriting profitability (excluding catastrophes) and strong growth prospects are capable of offsetting most of the negative factors related to the weakening economic and operating environment," said Sally Yim, a Moody's analyst.

Moody's predicts the Chinese P&C industry will grow slower this year than last because of the gloomy global and domestic economic outlook.

"After a year of poor underwriting performances in 2008 - caused by several catastrophes and poor investment - P&C insurers are starting to realize the importance and the need for tighter underwriting discipline," Yim said.


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