Accelerate insurance product service innovation to guide long-term capital into the technology sector

Securities Times Reporter Qin Yanling

On March 2nd, the Ministry of Science and Technology, the China Banking and Insurance Regulatory Commission, the Ministry of Industry and Information Technology, and the National Intellectual Property Administration jointly issued the “Opinions on Accelerating the High-Quality Development of Science and Technology Insurance to Strongly Support High-Level Scientific and Technological Self-Reliance and Self-Strengthening” (hereinafter referred to as the “Opinions”). The document proposes 20 policy measures around “who to protect, what to insure, and how to insure,” aiming to accelerate the development of a science and technology insurance system compatible with technological innovation.

Science and technology insurance is a vital part of the broader science and technology finance sector, playing an important role in dispersing innovation risks and supporting funding. The “Opinions” call for focusing on major national scientific and technological tasks, small and medium-sized tech enterprises, key areas of innovation, and critical links to strengthen insurance coverage. It also guides institutions to accelerate innovation in science and technology insurance products and services by promoting pilot reforms for long-term insurance fund investments and improving internal risk tolerance mechanisms for state-owned insurance institutions involved in venture capital, among other measures, to direct insurance funds toward technological innovation.

The “Opinions” advocate establishing a comprehensive insurance product and service system covering the entire chain and lifecycle of technological innovation. This system should not only increase support for major national scientific and technological projects but also strengthen insurance coverage for tech SMEs.

Specifically, regarding major national scientific and technological tasks, the “Opinions” propose establishing a national coordination mechanism for major technological breakthroughs in science and technology insurance; developing multi-entity risk dispersal models; improving multi-layer loss-sharing approaches; and establishing specialized insurance consortia in key technological fields to enhance risk mitigation for major technological breakthroughs.

Currently, industry-backed mutual insurance pools in key technological fields include the China Integrated Circuit Mutual Insurance Pool and the Beijing Commercial Space Insurance Mutual Pool. Industry insiders have noted that in innovative fields lacking historical data, forming mutual insurance pools is often suitable to alleviate underwriting difficulties. Once established, product diversification can meet different risk levels and needs.

Regarding the risk characteristics of tech SMEs, the “Opinions” propose specific measures to promote convenient and accessible science and technology insurance products and expand coverage. It encourages regions with conditions to reduce corporate insurance costs through increased premium subsidies and supports local efforts to tailor flexible insurance solutions based on the risk profiles of tech SMEs and scenarios like “use first, pay later” for technological achievements.

Zhang Daoming, temporary head of PICC Property and Casualty, told Securities Times that the industry currently faces challenges such as the need for extensive industry data to support precise product pricing, insufficient professional talent in complex tech insurance, and difficulties in channeling insurance costs into research projects. The “Opinions” aim to upgrade science and technology insurance from passive protection to active empowerment. For example, integrating data resources and promoting cross-departmental data sharing mechanisms will improve risk pricing accuracy and accelerate product innovation.

Furthermore, the “Opinions” emphasize leveraging the long-term and patient capital characteristics of insurance funds, with two key policy measures focusing on supporting major national science and technology projects and venture investments.

These include encouraging insurance funds to prioritize support for companies undertaking major national tech projects, piloting reforms for long-term investments, incentivizing investments in tech enterprises, and establishing internal risk tolerance mechanisms for state-owned insurance institutions involved in venture capital.

(Edited by Qian Xiaorui)

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