Better than expected trade data; a whopping 25% jump in exports in January is an early sign that the Chinese economy is recovering this year after, by its own standards, a sluggish 2012 that saw the country expand at its slowest rate for over a decade. With a new leadership team now in place state directed investment should underpin growth rates of 7-8% over the next five years; levels unimaginable in the West. In just a few short years, China will eclipse USA as the world’s largest economy of that there is no doubt amongst the leading academics and international agencies.

Even more impressively the non-life insurance market grew by 17% last year as the amount that households and businesses spend on insurance in absolute terms and as a percentage of overall GDP continues to increase. With a premium volume now standing at $85 billion, the Chinese market is inching closer to the size of the stagnating markets of France, UK and Germany. Completed eventually this month, the sale by HSBC to the Thai conglomerate CP Group of its 15.6% shareholding in leading Chinese insurer Ping An valued the company at a colossal $60 billion on a 100% basis; an indication if one was needed of the vast potential perceived in China for the insurance industry.

The source of all the excitement in fact represents the biggest challenge for insurers in China. That so little is insured by individuals and corporations is a massive business opportunity but the buying habits of a population intrinsically mistrustful of institutions with their money and fatalistic in nature will take time to alter. Equally, with brokers handling just 14% of the business currently traded, distributing products into this vast country will remain an obstacle until a deeper network of intermediaries evolves. For Foreign insurers especially it is tough going; their share of the market has hovered around the 1% level for some years. The Chinese Government actively encourages its domestic companies to succeed and predominate in a wide variety of industries, including insurance. Like all the other emerging economies, it appears that outsiders are welcome but not necessarily embraced.

This weekend we enter the new lunar year of the snake; a stealthy animal who works alone and carefully plans out all the details before making a move. Auspicious perhaps for Lloyd’s who since 2007 when they established a platform on the ground in China have quietly gone about their business, cautiously developing a modest presence at the specialist end of the market. The news last week, however, that Brit will follow recent movers Kiln in joining the six other syndicates already represented in Shanghai might suggest some momentum is beginning to emerge. Blessed with a product range and technical capabilities that few domestic insurers can match and a long tradition of partnering profitably with producers, 2013 could in fact be the year that Lloyd’s underwriters in China finally make an impression on the local industry.