China Insurance Market Intelligence: 2011 Edition
The insurance industry of China has been growing at a strong rate, mainly due to several significant factors which include its rising per capita disposable income, increasing urban population, improving rate of employment and the growing demography of elderly people in the country. The insurance industry in China is categorized into two segments: life and non-life.
The current population of China is calculated at over 1.3 billion, which makes life insurance the biggest segment of the insurance sector. A rapidly improving national economy, coupled with the burgeoning consumer class, is set to make China one of the most significant insurance markets in the world. Though the percentage share of life insurance is more than 70%, the non-life segment is projected to drive the growth of the Chinese insurance sector in the coming years. Meanwhile, the implementation of compulsory motor insurance law has made a significant contribution to the growth of the non-life insurance segment in the country.
Broadened investment channels for insurance funds, variety of innovative products, health insurance reforms etc. are some other factors contributing to the growth of this industry. Further, strong economic growth, increasing investment in real estate, increasing savings rate and growing consumer awareness about the importance of insurance is also adding to the industry growth. China has a rural population of around 53% of the national total, but few insurance products are designed for this class. This is a huge untapped market which offers growth opportunities to the insurance companies in China.
Geographically, premium generation is still concentrated in China’s more affluent provinces, namely, Guangdong, Jiangsu, Shangdong, Beijing, Shanghai, Dalian, Heibei, Tianjin, Liaoning, and Zhejiang. They collectively contribute to over 51% of premiums generated. China’s rural insurance market is still relatively undeveloped, and offers strong growth opportunities for insurers. However, the cost of expanding into rural markets can also be high, and profitability may not be attractive at the moment. As such, most insurers are still drawn to second or third tier cities, where growth prospects are good and the markets less saturated than first tier cities.
The current population of China is calculated at over 1.3 billion, which makes life insurance the biggest segment of the insurance sector. A rapidly improving national economy, coupled with the burgeoning consumer class, is set to make China one of the most significant insurance markets in the world. Though the percentage share of life insurance is more than 70%, the non-life segment is projected to drive the growth of the Chinese insurance sector in the coming years. Meanwhile, the implementation of compulsory motor insurance law has made a significant contribution to the growth of the non-life insurance segment in the country.
Broadened investment channels for insurance funds, variety of innovative products, health insurance reforms etc. are some other factors contributing to the growth of this industry. Further, strong economic growth, increasing investment in real estate, increasing savings rate and growing consumer awareness about the importance of insurance is also adding to the industry growth. China has a rural population of around 53% of the national total, but few insurance products are designed for this class. This is a huge untapped market which offers growth opportunities to the insurance companies in China.
Geographically, premium generation is still concentrated in China’s more affluent provinces, namely, Guangdong, Jiangsu, Shangdong, Beijing, Shanghai, Dalian, Heibei, Tianjin, Liaoning, and Zhejiang. They collectively contribute to over 51% of premiums generated. China’s rural insurance market is still relatively undeveloped, and offers strong growth opportunities for insurers. However, the cost of expanding into rural markets can also be high, and profitability may not be attractive at the moment. As such, most insurers are still drawn to second or third tier cities, where growth prospects are good and the markets less saturated than first tier cities.
1. INDUSTRY SNAPSHOT
1.1 Industry Structure
1.1.1 Largest untapped insurance markets in the world and holds huge potential
1.1.2 Increasing number of foreign insurers led to rise in competition level
1.1.3 Characterized as concentrated oligolpoly- insurance industry
1.2 Market Overview
1.2.1 Market Size & Growth
1.2.1.1 Growth in overall premiums due to increasing demand for insurance products
1.2.1.2 Growth Is Mainly Attributed to Life and Health Insurance Segment
1.2.1.3 Demographic Changes and Tax Reforms Propelled the Growth
1.2.2 Market Segments
1.2.2.1 Life Insurance is the Largest Segment of the Chinese Insurance Business
1.2.2.2 Negative growth in life insurance premiums in 2009 due to decline in equity-linked and unit-linked products
1.2.2.3 Motor insurance recorded fastest growth in non-life insurance sector
1.2.3 Market Density & Penetration
1.2.3.1 Considerably low insurance density compared to other ASEAN countries
1.2.3.2 Lower insurance penetration in non-life sector compared to life segment
1.2.4 Market Share
1.2.4.1 Oligopolistic nature of non-life insurance sector with PICC and Ping An P&C as largest insurers
1.2.4.2 China Life and Ping an P&C as largest life insurers
2. INDUSTRY ANALYSIS
2.1 Industry Developments
CIRC Encourages Realty Investment
Foreign Insurers Speed up Expansion in China
CIRC to Expand Investment Channels for Insurers
Development of Insurance Securitization
New Accounting Changes
2.2 Market Drivers
Economic Growth
Motor Insurance
Rising Health Insurance
Expanding Distribution Channels
Growth in Real Estate Sector
3. COUNTRY ANALYSIS: RISK ASSESSMENT
3.1 Political Environment
3.2 Macro-economic Indicators: Current and Projections
4. INDUSTRY OUTLOOK: FORECAST AND PROJECTIONS
4.1 Recovery in overall economy and rising gross savings driving insurance sector in future
4.2 Non-life sector driven by rising demand for motor insurance
1.1 Industry Structure
1.1.1 Largest untapped insurance markets in the world and holds huge potential
1.1.2 Increasing number of foreign insurers led to rise in competition level
1.1.3 Characterized as concentrated oligolpoly- insurance industry
1.2 Market Overview
1.2.1 Market Size & Growth
1.2.1.1 Growth in overall premiums due to increasing demand for insurance products
1.2.1.2 Growth Is Mainly Attributed to Life and Health Insurance Segment
1.2.1.3 Demographic Changes and Tax Reforms Propelled the Growth
1.2.2 Market Segments
1.2.2.1 Life Insurance is the Largest Segment of the Chinese Insurance Business
1.2.2.2 Negative growth in life insurance premiums in 2009 due to decline in equity-linked and unit-linked products
1.2.2.3 Motor insurance recorded fastest growth in non-life insurance sector
1.2.3 Market Density & Penetration
1.2.3.1 Considerably low insurance density compared to other ASEAN countries
1.2.3.2 Lower insurance penetration in non-life sector compared to life segment
1.2.4 Market Share
1.2.4.1 Oligopolistic nature of non-life insurance sector with PICC and Ping An P&C as largest insurers
1.2.4.2 China Life and Ping an P&C as largest life insurers
2. INDUSTRY ANALYSIS
2.1 Industry Developments
CIRC Encourages Realty Investment
Foreign Insurers Speed up Expansion in China
CIRC to Expand Investment Channels for Insurers
Development of Insurance Securitization
New Accounting Changes
2.2 Market Drivers
Economic Growth
Motor Insurance
Rising Health Insurance
Expanding Distribution Channels
Growth in Real Estate Sector
3. COUNTRY ANALYSIS: RISK ASSESSMENT
3.1 Political Environment
3.2 Macro-economic Indicators: Current and Projections
4. INDUSTRY OUTLOOK: FORECAST AND PROJECTIONS
4.1 Recovery in overall economy and rising gross savings driving insurance sector in future
4.2 Non-life sector driven by rising demand for motor insurance
LIST OF CHARTS:
Chinese Annual Insurance Premium: 2005-2009
Chinese Insurance Premium: Q110 Vs. Q109
Chinese Insurance Premium Share (%) by Segment: 2009
Chinese Insurance Premium by Segment: 2005-2009
Chinese Life Insurance Premium Share by Premium Type (%): 2009
Chinese Personal (Life) Insurance Segment Break-up (%): 2009
Chinese Insurance Density (US$): 2002 – 2009
Chinese Insurance Penetration (%): 2002 – 2009
Chinese Market Share of Top Players in Life Insurance Segment (%): 2009
Chinese Market Share of Top Players in Non-Life Insurance Segment (%): 2009
Combined Ratio of Main Non-Life Insurers (%): 2007-H109
GDP (Value) & Real GDP (%) Growth of China: 2005–2009
Urban & Rural Households' Savings Deposit and Growth: 2005-2009
Chinese Motor Insurance Annual Premium Growth: 2005-2009
Chinese Health Insurance Annual Premium Growth: 2005-2009
Real Estate Investments in China: 2005-2009
Forecast: Chinese Insurance Industry: 2009A – 2013E
Forecast: Chinese Life & Non-Life Insurance Industry: 2009A – 2013E
Chinese Annual Insurance Premium: 2005-2009
Chinese Insurance Premium: Q110 Vs. Q109
Chinese Insurance Premium Share (%) by Segment: 2009
Chinese Insurance Premium by Segment: 2005-2009
Chinese Life Insurance Premium Share by Premium Type (%): 2009
Chinese Personal (Life) Insurance Segment Break-up (%): 2009
Chinese Insurance Density (US$): 2002 – 2009
Chinese Insurance Penetration (%): 2002 – 2009
Chinese Market Share of Top Players in Life Insurance Segment (%): 2009
Chinese Market Share of Top Players in Non-Life Insurance Segment (%): 2009
Combined Ratio of Main Non-Life Insurers (%): 2007-H109
GDP (Value) & Real GDP (%) Growth of China: 2005–2009
Urban & Rural Households' Savings Deposit and Growth: 2005-2009
Chinese Motor Insurance Annual Premium Growth: 2005-2009
Chinese Health Insurance Annual Premium Growth: 2005-2009
Real Estate Investments in China: 2005-2009
Forecast: Chinese Insurance Industry: 2009A – 2013E
Forecast: Chinese Life & Non-Life Insurance Industry: 2009A – 2013E
LIST OF TABLES:
Key Macroeconomic Indicators: (2009A – 2013E)
Key Macroeconomic Indicators: (2009A – 2013E)
