CHINA Law and Practice Contributed by: Elsie Shi, George Yu, Eleanor Gu and Zach Xu, Jincheng Tongda & Neal Law Firm
members, unless such persons intentionally caused the loss.
become more sophisticated. “Smart contracts” on the blockchain automatically trigger payouts when satel- lite data confirms a disaster, eliminating the need for manual on-site claims adjustment and significantly improving liquidity for the insured. Anti-fraud graphs The use of “knowledge graph” technology is common in identifying organised insurance fraud. By analys- ing vast networks of relationships between claimants, repair shops and hospitals, insurers can detect circular fraud rings that are invisible to human investigators. 10.2 Regulatory Response The NFRA maintains a dual approach of “active encouragement” and “strict boundary setting”. The regulatory philosophy in 2025 emphasised that tech- nology must not bypass financial licensing require- ments or infringe on data privacy. Data Security and Privacy Protection This is the top regulatory priority. The Regulation on Administration of Network Data Security imposes strict obligations on data processors. The regulator strictly scrutinises the cross-border transfer of insur- ance data and the authorisation chains in “Big Data” risk control. Insurers are required to ensure that data obtained from third parties is collected with explicit user consent, preventing the “abusive use” of per- sonal information. Governance of IT Outsourcing and AI Pursuant to the Measures for the Administration of IT Outsourcing Risks of Banking and Insurance Insti- tutions, the regulator has clarified that insurers can- not transfer their primary management responsibili- ties to third-party tech vendors. If a system failure or data breach occurs at the vendor level, the licensed insurer is held accountable. Furthermore, the regula- tor is increasingly focused on “algorithm governance”, requiring insurers to ensure that AI-driven pricing and underwriting algorithms are transparent, explainable and free from algorithmic discrimination against spe- cific consumer groups. Rectification of the “Expense Gap” The regulator has launched campaigns to regulate the co-operation between insurers and internet platforms.
10. Insurtech 10.1 Insurtech Developments
In 2025, insurtech in China transitioned from a phase of “channel digitalisation” (moving sales online) to “industrial intelligence” (deep integration of AI and IoT into the insurance value chain). The market is defined by the following key developments. Collaborations Collaborations have evolved from simple traffic acquisition partnerships to deep technical integra- tion. Insurance companies are increasingly partnering with industrial technology firms to access real-time risk data. • New energy vehicles – insurers are collaborating with electric vehicle (EV) manufacturers to utilise “telematics” data. Unlike traditional factors, this data allows for dynamic risk assessment based on driving behaviour and battery health, facilitating the development of usage-based insurance models. • Healthcare integration – in the health sector, col- laborations between insurers and third-party health management platforms have created “interactive policies”. Through wearable devices and author- ised medical data sharing, insurers offer premium discounts or increased coverage to policyholders who meet health targets, shifting the role of insur- Following the general AI boom, major Chinese insur- ers are deploying proprietary “insurance vertical large models” in recent years. These AI systems go beyond simple chatbots; they are capable of analysing com- plex medical records for underwriting, assisting in legal liability determination and even generating code for internal systems. Parametric Insurance 2.0 Powered by blockchain and satellite remote sensing, agricultural and catastrophe insurance products have ance from “payer” to “health manager”. Products and Technology Applications Vertical large language models
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