Three mutuals approved this week by the Asian power’s regulators

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China’s insurance regulators have this week approved the establishment of three mutuals – the first ever to be set up in the country.

This move has been seen as positive by China-based credit rating agency Dagong.

Commenting on the move, Dagong Europe financial institutions director and insurance lead analysts Linas Grigaliunas said: “In general we see this as a positive sign of the Chinese insurance industry becoming more open and diversified”

Grigaliunas did, however, say suggest proceeding with caution adding: “We do caution that mutual organizations have specific organisational and operational complexities compared to conventional insurers and some of these mutuals emerging in China might underestimate that. In addition they might be created due to easier market access rather than common social or specific risk management needs, like the ones we usually see.”

The three mutuals are Zhonghui Property Mutual, Huiyou Construction Property Mutual and Xinmei Life Mutual.

Grigaliunas assert that Dagong was “positive with market opening”, but added: “The final results will depend on execution and market dynamics, whether the industry will benefit from mutual risk management structures and new products or it will be used to access the common business lines and further fuel price competition.”