The document discusses the credit insurance market in China. It provides an overview of key drivers and players in China's credit insurance market. The market has grown due to increasing trade volumes and longer payment terms between Chinese companies. However, the market remains relatively underdeveloped compared to non-life insurance. Major players include Sinosure, which dominates the export credit insurance space, and CPIC, AIG, and Ping An which offer domestic and export credit insurance products. The government is taking steps to further regulate the industry and encourage its development.

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The credit insurance market in China

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2
The market dynamics of credit insurance in
China
1.
Drivers and obstacles of China’s credit
insurance market
2.
03
09
13
Main players in China’s credit insurance
market
3.
CONTENT OUTLINE

3. 3
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The market dynamics of credit
insurance in China
1

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Trade in China continues to be dynamic
The world saw a continuation in the upward trend in China’s export & import in the last decade. In 2020, total exports and imports
reached record highs and the international market share was the highest ever. The booming export and import in China lead to
more business opportunities for credit insurance.
4
1,577.8
1,898.5
2,048.7
2,204.0
2,342.3 2,273.6
2,097.6
2,263.4
2,486.8 2,499.0
2,743.3
1,396.3
1,743.5
1,818.4
1,945.0 1,959.2
1,679.6 1,587.9
1,843.8
2,135.8 2,077.1
2,177.2
0
500
1,000
1,500
2,000
2,500
3,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Value of Trade in China from 2010 to 2020
(In USD billions)
Export of Goods Import of Goods
Source: statista.com designed by Daxue consulting

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The diversified trading partners of China
In 2020, China’s top five trading partners are ASEAN, the EU, the US, Japan and South Korea, which shows that the trading partners
become more diversified.
5
1st ASEAN
725.2 billion USD
2nd EU
688.5 billion USD
3rd United States
621.2 billion USD
4th Japan
336.6 billion USD
5th South Korea
301.4 billion USD
Main trade partners of China
Top 5 regions & countries in 2020
Source: State Council of PRC designed by Daxue consulting

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Credit Insurance safeguards companies from failed contracts or debt
6
Sale on credit
transaction with
customers
Your
Suppliers
Your
Customers
(Buyers)
Credit
Insurance
Company
Insolvency risks
covered by credit
insurance
company
Safeguards
suppliers’
business
Main Participants
How credit insurance works
It provides a guarantee that your insurer will pay up when your
customer doesn’t. For example if your customer declares
bankruptcy after you have shipped goods to them but before
they have paid you, the credit insurance will cover your loss.
Main Types of Products
Credit insurance (信用保险) is a type of insurance where the insurer is liable for the economic loss suffered from failed
contracts or debt insolvency.
Foreign Export Credit Insurance
Domestic Credit
Insurance
Middle / Long
Term Export
Credit
Insurance
Export buyer’s credit insurance
Domestic trade credit
insurance
Sales credit
insurance
Loan credit insurance
Personal loan credit
insurance
Export supplier’s credit insurance
ST Export
Credit
Insurance
Exporters credit insurance
Financing
banks credit
insurance
Export credit insurance (Bank)
policy
Export credit insurance
(Forfaiting) policy

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The credit insurance market in China has yet to reach maturity
7
16.1 15.5
20.1
19.2
20.1
21.4
24.2
19.9
2012 2013 2014 2015 2016 2017 2018 2019
The premium income of credit insurance and its share in the non-life insurance industry in China
(billion RMB)
Credit insurance in China is underdeveloped because of its special business model in terms of marketing and operation.
The business scale of credit insurance has always been relatively small compared to the entire non-life insurance industry. The
main reason is that only large companies like Ping An, PICC, and Dadi Insurance have entered the credit insurance market,
many other insurance companies are short of awareness and understanding of credit insurance business.
Source: National Bureau of Statistics, designed by daxue consulting
2.9% 2.4% 2.7% 2.3% 2.2% 2.0% 2.1% 1.5%
Credit
insurance /
non-life
insurance Less medium and long-term
credit insurance sales due to the
US-China trade war.

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A deeper look at the insurance market’s main overseas sector
8
40.9 42.6
48.9
58.1
61.3
2015 2016 2017 2018 2019
The insured amount of overseas investment insurance
of SINOSURE
(in billion USD)
363.9
375.2
412.8
481.4
486.9
21.8
22.3
23.9
23.5
11.9
2015
2016
2017
2018
2019
The insured amount of export credit insurance of SINOSURE
(in billion USD)
Medium and long-term Short-term
Source: SINOSURE annual report 2019, designed by daxue consulting
More short-
term but less
medium and
long-term
credit
insurance
sales due to
the US-China
trade war.
The overseas investment insurance market has stable growth.
However, the insured amount of short-term export credit insurance was halved as a direct result of the decline in exports
due to the US-China trade war.

9. 9
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2 Drivers and obstacles of China’s
credit insurance market

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Government attaches significance to export credit insurance
10
Policy Date of release Effects
Interim Measures for the Supervision of Credit Guarantee
Insurance Business
2017.07
• clarify the boundaries and principles of
business development
• rectify the disorderly conduct of the
previous market
The new Regulation of Credit
Insurance and Guarantee
Insurance Business
Operational Guidelines for Pre-
insurance Management of
Financial Credit Insurance
Business
2020.05
The two Operational
Guidelines launched in
2020.09
• regulate business practices
• prevent and resolve risks
• protect the legitimate rights and interests
of insurance buyers
• promote the sustainable and healthy
development of credit insurance
business.
Operational Guidelines for
Post-insurance Management
of Financial Credit Insurance
Business
In recent years, with the development of the insurance market, some parts of the Interim Measures for the Supervision of
Credit Guarantee Insurance Business can no longer fully adapt to the new situation and issues.
To further strengthen the supervision of credit insurance business, regulate business practices and prevent and mitigate risks,
the CBIRC has issued the “The new Regulation of Credit Insurance and Guarantee Insurance Business” in 2020.

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55
59 57 56
68
76
86 86
0
10
20
30
40
50
60
70
80
90
100
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016 2017 2018 2019
Average payment terms (days) of Chinese companies
30 Days 60 Days 90 Days 120 Days Above 120 Days Average Payment Terms(RHS)
Chinese companies have increasingly longer payment terms
11
3%
7%
9%
10%
18%
53%
Commercial Disputes
Changes in Company Structure
Inefficiency of Banking System
Fraud
Management Problems
Financial Difficulties
0% 20% 40% 60%
Main reasons for corporate payment delays
(2019)
Source: Coface designed by daxue Consulting
In recent years, due to financial difficulties and
management problems, longer payment terms have been a
trend among Chinese companies along with that is the
credit risk which is also on high alert.
Therefore, credit insurance is becoming a solution for
companies that want to hedge this risk in B2B business
activities.

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Credit insurance is facing challenges in China
Despite more opportunities in the credit insurance market, the industry is still developing on a small scale and there are some
challenges players need to face.
12
Lack of integration with the extended
ecosystem
Chinese credit insurance companies could be more
effectively integrated. This includes receivables
finance, new trade platforms, supply chain and
technologies.
Single business entity
Because of the high market access threshold,
there is only one domestic export credit
insurance agency (SINOSURE), and no more
than five domestic trade credit insurance
agencies, and fewer agencies operating other
credit insurance products.
Single insurance products
The main focus of the market is on export credit
insurance and there are few products that cover
credit risk due to various forms of credit
business, and even fewer products for
investment and consumer sectors.
Fraud risk
The growth in fraudulent claim attempts
makes credit insurance difficult to distinguish
real cases from fraud. For example, some
firms might come to their insurer and
fabricate some conditions for compensation.

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3 Main players in China’s credit
insurance market

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Sinosure: The main seller of trade credit insurance (1/2)
14
Short-term export
credit insurance,
79.8%
Overseas investment
insurance, 10.1%
Domestic trade credit
insurance, 7.9%
Others, 2.2%
Insured amount structure of SINOSURE
(2019)
2.7 2.9
2.1
2017 2018 2019
Premium underwritten
(in billion USD)
China Export & Credit Insurance
Corporation (SINOSURE) is a state-
funded and policy-
oriented insurance company
established and supported by the
state in 2001 to promote China’s
foreign economic and trade
development and cooperation.
As an independent legal group, it
provides principal products
including medium and long-term
export credit insurance, short-term
export credit insurance, overseas
investment insurance and
domestic trade credit insurance.
The premium decline in
2019 is mostly caused by
the drop in short-term
export credit insurance
that composes the
majority of the premium
income.
Source: SINOSURE annual report 2019, designed by daxue consulting
Source: SINOSURE annual report 2019, designed by daxue consulting

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Sinosure: The main seller of trade credit insurance (2/2)
15
By providing insurance for foreign trade and investment cooperation, Sinosure (China Export and Credit Insurance Corporation)
promotes the development of economics and trade, and focuses on supporting the export of goods, technology and services.
ST Export Credit
Insurance
M / LT Export Credit
Insurance
• Covers risks in relation to the collection of deferred payment by exporters, the account receivable by financial leasing
companies and the recovery of loan principal and interest by financial institutions.
• It has 2 kinds of products: Export Buyer’s Credit Insurance and Export Supplier’s Credit Insurance
• The insured period is normally 2 to 15 years.
• Applicable to companies or banks registered in China. The trade contract is made in writing, authentic, lawful and valid.
Cover commercial risks including buyer’s bankruptcy and default on payment.
• The insured period is no longer than 1 year.
Domestic Trade Credit
Insurance
Overseas investment
insurance
• Protects investors and financial institutions from economic losses resulting from political risks such as expropriation,
exchange restrictions, war, political riot and breach of contract in the country where investment is made.
• The maximum insured period is 20 years.
• It provides coverage for the risk of receivables collection for goods or services exported from China by letter of credit or non-
letter of credit.
• It include 4 types of products: Comprehensive Cover Insurance, Small and Medium-Size Enterprise Comprehensive Cover
Insurance, Small and Micro Enterprise Easy Credit Insurance and Additional Pre-export Insurance
• The insured period is normally 1-2 years.
Source: official web of Sinosure, designed by daxue consulting

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CPIC: Focus on enterprise credit insurance
CPIC has a credit sales insurance product named Domestic Specific business contract credit insurance. This insurance product is
for loss of collections due to the buyer’s bankruptcy, inability to pay debts or long-term default.
Source: official web of CPIC, designed by daxue consulting
Insurance amount (¥)
Introduction
The insurance process is rather simple and
straightforward. The company that wishes to
be insured need to submit its info to CPIC
and CPIC will do the necessary background
research and review before approval and
passing the contracts.
Has 4 kinds of credit insurance in total.
Credit insurance of CPIC
Export credit
insurance for
small trade
enterprises
targets export
collection risk.
Short-term
export credit
insurance for
trade
companies
targets the
risks of bad
debt or
delinquency to
the buyers
Short-term
domestic trade
credit insurance
targets possible
bad debts or
defaults of
buyers.
Credit insurance
for commercial
contracts covers
the loss of
receivables due
to the buyer's
bankruptcy,
insolvency, or
prolonged
default.
Products
Small enterprises export credit
insurance
Short-term export credit
insurance
Short-term domestic trade
credit insurance
Domestic credit insurance
Coverage (¥）
to be
determined by
size and value

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Coface: An international leading brand in the market
17
As a leading player, Coface offers a comprehensive line of credit insurance to protect clients against potential non-payment by
their customers, with cover provided in approximately 200 countries.
Once the payment arrears is ascertained, Coface steps in to collect the receivable from clients. The company implement
proven collection techniques in order to maximize the chances for successful collection.
1. TradeLiner 2. TopLiner 3. Single Risk
TradeLiner means continuous prevention
and protection from the risk of non-
payment of sales in domestic and export
markets. By purchasing the product, clients
can insure consumer goods, services and
operations linked to international trade.
The source of risk includes:
• Commercial: non-payment by customers.
• Political: non-payment due to customers’
government.
• Linked to a natural disaster.
TopLiner is designed for situations
where, for a given buyer, the insured
company has received a guarantee
with an amount which is less than
that requested or no guarantee at all.
The price depends on the risk
assessment and the amount and
duration of the requested cover.
Single Risk is a solution to companies and
financial institutions exposed to
commercial and political risks abroad.
Single Risk revolves around five innovative
contracts:
• Political Risk guarantee
• Export & Domestic guarantee
• Import guarantee
• Financing guarantee
• Investment guarantee
The main credit insurance solutions of Coface
Source: official web of Coface, designed by daxue consulting

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AIG and Ping An: Domestic and export credit insurance providers
18
AIG focuses on domestic trade credit insurance whereby receivables arising from underwriting sales of credit between the
insured and its buyers, including the buyer’s bankruptcy or insolvency and long-term default.
PingAn mainly provides export credit insurance with simple procedures, flexible terms and fast approvals.
The company must be established for at least 2 years, has a
bill nearly half a year that is 1.2 million at least, has a value-
added tax invoice and two years of annual statements, the
most recent monthly statement, and the most recent six
months of invoices; more importantly, applying for credit
insurance.
The loan of a corporate applicant in the past three months
cannot be overdue, and the corporate debt ratio cannot
exceed 60-70%.
Ping An Insurance (Group)
Company of China Ltd.
Both companies provide
fast claim services and
clear insurance process.
AIG has more experience
in domestic credit
insurance in China.
PingAn focuses on export
credit insurance
Moreover, AIG is using
“Excess of Loss” model
of underwriting, and is the
only insurance company
on the market that
provides non-cancellable
credit limits.
As for PingAn, credit is
presently a small share of
its business.
American International Group
AIG has several unique selling points such as fast and
quality service.
AIG has easy access to loan services due to its high
financial credibility over the years and strong financial
portfolio.
AIG has a strong underwriting capacity, adequate
underwriting limits, extensive international reinsurance
support, and more than 30 years of credit risk underwriting
experience.
Source: official web of AIG and PingAn, designed by daxue consulting

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