Chinese Life Insurance Segment Ranked as Sixth Largest in the World in 2011, Reports Timetric
15 Jan 2013 • by Natalie Aster
The Chinese life insurance segment ranked as sixth-largest in the world and the second-largest in the Asia-Pacific region in 2011, with Japan being the first. China is home to some of the biggest insurance companies in the world, and the significant growth in the Chinese life insurance segment can be attributed to an expanding aging population, robust economic growth, increased disposable income in China’s middle-class population, and improving awareness of the need for insurance, especially among the younger generations in the country.
According to the report “Life Insurance in China, Key Trends and Opportunities to 2016” by Timetric, the life insurance segment is going through a lean period, marred by uncertain economic growth and volatile market conditions. The ongoing tightening of regulation by the China Insurance Regulatory Commission (CIRC) is also acting as hindrance to growth. Despite the pressures, China remains a significant opportunity for insurers given the largely underpenetrated nature of the life insurance segment. The life insurance penetration rate of 2.0% of GDP in 2011 highlights the opportunities within the industry over the forecast period.
Life Insurance in China, Key Trends and Opportunities to 2016
Published: October, 2012
Price: US$ 1,950.00
China’s life insurance segment will continue to expand over the forecast period
In terms of size, the Chinese life insurance segment is expected to increase at a CAGR of 13.8% over the forecast period. The growth is expected to be driven by rising disposable incomes in the country as a result of strong economic growth; changing demographics, including an aging population and an overall increase in the working population; stronger penetration of distribution channels selling life insurance products; and the availability of a wider range of life insurance products in the country.
New product development
Innovations in information technology and communications have also impacted the Chinese insurance industry. During the review period, there has been a gradual increase in the number of insurance policies being sold over the internet and by telephone in China. In November 2011, the CIRC awarded its third approval for variable annuity products to Huatai Life Insurance, the largest to date. The promotion of long-term products and retirement solutions by permitting sales of variable annuity products is expected to support the growth of life insurance.
New accounting rules and further consolidation to change the structure of Chinese life insurance
The CIRC has announced new administrative rules that will become mandatory for insurance companies operating in the country in relation to reporting their premiums, and single-premium investment products may not be included in gross premium statistics. Nonetheless, the new accounting rules will change the competitive landscape, as companies with high regular premiums may report an apparent increase in market share. The CIRC has increased its focus on solvency and is operating a model that requires companies to maintain a solvency ratio of at least 100% of actual capital over the statutory minimum capital required (MCR).
More Insurance Market Research Reports by Timetric are Also Available:
- Non-Life Insurance in China, Key Trends and Opportunities to 2016
- Personal Accident and Health Insurance in China, Key Trends and Opportunities to 2016
- Reinsurance in China, Key Trends and Opportunities to 2016
More information can be found in the report “Life Insurance in China, Key Trends and Opportunities to 2016” by Timetric.
To order the report or ask for sample pages contact [email protected]