China Pushes Yuan in Shipping Insurance and Builds Maritime Risk Pricing Mechanism
Key Facts
China’s Ministry of Commerce called for greater use of the yuan in shipping insurance, including the purchase of coverage and settlement of claims in China, as well as the overseas operations of Chinese companies. The guidance aims to expand the role of the local currency in a sector tied to trade and maritime transport. It also calls on shipbuilders, shipping and foreign-trade companies, and insurers to use the yuan more widely in marine insurance. This places the Chinese currency at the center of efforts to regulate the shipping-related insurance market, alongside the development of tools to assess and price risk. The ministry says the broader goal is to build an insurance system capable of providing protection on its own and delivering services to global markets.
The plan includes establishing a platform for sharing shipping insurance data and using creditworthiness assessment results in maritime supervision. It also encourages the introduction of artificial intelligence to help determine prices and the creation of a dynamic pricing mechanism based on real-time risk data. The guidance thus links data sharing and assessments of changing risks to the cost of coverage. The ministry describes the intended mechanism as scientific and dynamic, strengthening the domestic sector’s ability to assess and price risks. These steps place information and technology infrastructure among the pillars of marine insurance development, alongside wider use of the yuan.
The guidance includes preparing standard Chinese marine insurance terms in both Chinese and English, aligned with international market requirements. It also calls for developing net loss rates for marine insurance risks and exploring a system of prices that vary according to risk levels. This means the initiative extends beyond the currency used to the rules governing contract wording and loss assessment. The ministry says combining standard terms with loss rates and a differentiated pricing mechanism is intended to develop domestic market tools. Bilingual wording enables the handling of products covering international trade and ocean-going shipping.
The plan also seeks to increase insurers’ and reinsurers’ capacity to absorb large risks, while encouraging forms of commercial cooperation to expand the supply of coverage. The guidance cites geopolitical conflict, disruptions to logistics services and supply chains, cybersecurity, and navigation in icy regions among the special or emerging risks requiring coverage. It also calls on reinsurers to provide stable, long-term underwriting support and strengthen protection resilience. This expansion of coverage is part of an effort to increase the capacity to bear large claims while keeping risks under control. The ministry links insurance development to the continuity of logistics services, industry, and supply.
On prices in China, the producer price index rose 5.7% year on year in October, with the rate of increase widening by 0.7 percentage points from the previous month. The index also rose 0.7% month on month, but the pace of the monthly increase slowed by 0.5 percentage points from September, according to the National Bureau of Statistics. Prices for coal mining and washing rose 36.6% year on year, while oil and gas extraction prices increased 35.0%. Prices for processing petroleum, coal and other fuels rose 29.9%, and prices for chemical materials and products increased 16.4%. The figures show divergent movements between annual producer inflation and month-to-month price changes, as well as across different industrial sectors.
For consumer prices, the core index, excluding food and energy, rose 0.8% year on year in October, down 0.2 percentage points from the previous month. By contrast, gasoline prices rose 22.4% year on year, contributing about 0.63 percentage points to the annual increase in the consumer price index, according to the National Bureau of Statistics. The indicators show diverging trends in core prices and fuel prices, alongside rising producer prices. In foreign exchange, the dollar closed at 6.67192 against the offshore yuan on November 8, compared with a close of 6.67225 on November 6, according to EL7 data. This reading records a limited move between the two closes cited, as the guidance calls for greater use of the yuan in marine insurance operations.
The guidance allows insurers to file Chinese and English insurance terms for products covering import and export cargo insurance and ocean-going vessel insurance. In emergencies arising from international events such as geopolitical conflicts, companies may submit documents registering a change in the scope of insurance liability within 10 working days of making the change. This deadline provides a regulatory process for coverage adjustments prompted by sudden international developments. These arrangements accompany the creation of a data-sharing platform, the preparation of standard terms and loss rates, and the development of reinsurance capacity. The ministry says its ultimate goal is to increase the marine insurance system’s capacity to provide protection and serve global markets.