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 State Intellectual Property Office 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 strengthening insurance coverage for major national scientific and technological tasks, tech-based small and medium-sized enterprises, and key areas and links of innovation. 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 enhance insurance coverage for tech-based 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 methods; and establishing specialized insurance consortia in key technological fields to strengthen risk dispersal mechanisms for major technological breakthroughs.

Currently, industry-led co-insurance groups in key technological fields include the China Integrated Circuit Co-insurance Group and the Beijing Commercial Aerospace Insurance Co-insurance Group. Industry insiders have noted that in innovative fields lacking extensive historical data, co-insurance models are suitable for alleviating underwriting difficulties. Once established, these can be expanded with diverse products to meet different needs.

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

Zhang Daoming, temporary head of PICC Property and Casualty, told Securities Times that current challenges in developing science and technology insurance include the need for substantial 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 shift science and technology insurance from passive protection to proactive empowerment. For example, integrating data resources and improving cross-departmental data sharing mechanisms will enhance 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 national major science and technology projects and venture investments.

These include encouraging insurance funds to prioritize support for enterprises undertaking major national projects; promoting pilot reforms for long-term investment of insurance funds; encouraging insurance institutions to increase funding support for venture capital firms focusing on frontier technology fields; and establishing internal risk tolerance mechanisms for state-owned insurance institutions involved in venture investments.