BEIJING, July 6 (Xinhua) -- China's removal of a foreign ownership cap on life insurers in 2020, a year ahead of schedule, will have limited impact on the domestic life market in the near to medium term, Fitch Ratings said in its latest report.

The move will attract more international insurers to tap the fast-growing market in China, but large domestic companies have strong business profiles and credit fundamentals to ward off the increased competition, the ratings agency noted.

In 2018, the 28 life insurers that have foreign shareholders held only 8 percent of the life insurance market's direct premiums.

Larger domestic insurers are better positioned to adapt to the industry shift because they have better brand recognition and well-established distribution channels, with large agency forces to support the continued trend in product restructuring, according to the report.

"We expect large domestic insurers to maintain this comparative advantage," Fitch said.

Increased participation by foreign insurers from developed markets could bring more expertise and experience, product innovation and technologies to improve operating efficiency, risk management and corporate governance in China.

In view of the steady economic growth and regulatory incentives to promote insurance demand, both insurers and policyholders will benefit from improvement in market diversity and product choice, the agency added.

China announced earlier this month that the country will lift restrictions on foreign ownership of securities, futures and life insurance companies by 2020, earlier than the original plan of 2021. Currently, the limit on foreign ownership in these entities is 51 percent. Enditem

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