Article at a glance:

Building profitable auto insurers in China

• China’s transition from bicycles to automobiles in urban areas has ignited the country’s auto insurance market. But the industry’s profitability is lagging behind its growth as managers of Chinese insurance companies chase short-term revenues without developing discipline in underwriting and managing claims—a discipline needed to bolster the bottom line.
• To raise profits, Chinese insurers must collect and manage market information to mitigate risk and control costs by finding the most cost-effective ways to use distributors, segmenting customers by risk, and managing claims processes more rationally.