S&P: Insurers on path to more sustainable growth

China's insurance industry is likely to continue to grow next year, though at a slower but more sustainable pace, international rating firm Standard & Poor's said on Thursday.

"Insurers are no longer just focused on pure growth. Many players are becoming more profit oriented, with a higher awareness of risk management and willingness to diversify into new product areas. And that should mean more sustainable growth in the longer term," said Standard & Poor's credit analyst Connie Wong.

But the sector's performance may be volatile and subject to natural disasters. Inadequate pricing or underestimated risk profiles are likely to continue because of stiff competition.

However, Standard & Poor's expect a continued negative bias in credit trends for life insurers over the next 12 months because of the slower growth, volatile operating performances, and modest capitalization.

The credit trends for the life sector may stabilize if recently improved operating performances and growth continue for the next year and capitalization levels don't significantly deteriorate.

The report also suggests that the industry may need additional capital to support the continued growth of assets and cover the level of underwriting exposure, liabilities, and other operational risks.