China's Insurance Market

China’s insurance market posted remarkable changes in terms of size and structure in the past decade, according to the country’s top insurance regulator.

The country’s insurance capital rose from 6.27 trillion yuan (about 872 billion U.S. dollars) in 2012 to 24.71 trillion yuan at the end of June 2022, with an average annual growth rate of 15.6%, data from the China Banking and Insurance Regulatory Commission showed.

According to China Life & Non-Life Insurance Market Outlook 2023, insurance capital investment targets had also been diversified, expanding from banking deposits, bonds and stocks to equities, real estate, asset management products and financial derivatives, among others.

By the end of June this year, China had 33 asset management firms taking care of insurance funds, up from 13 in 2012.

Insurance capital that helps finance the real economy in the long and medium term surged from about 4 trillion yuan in 2012 to 21.85 trillion yuan at the end of June, according to the commission.

China's Insurance Market

Premium incomes of China’s insurance companies posted steady growth last year, according to a communique released by the National Bureau of Statistics.

Premiums of insurers nationwide in 9M2022 rose to 4.49 trillion yuan (about 712.7 billion U.S. dollars), up 4 percent year on year in comparable terms, said the communique.

In breakdown, life insurance premiums reached 2.36 trillion yuan, and accident and health insurance premiums hit 965.7 billion yuan. Property insurance premiums stood at 1.17 trillion yuan.

All types of insurance compensation totaled 1.56 trillion yuan in 2021, according to the communique.

China’s insurance sector maintained steady operation and adequate solvency in the first three quarters of this year, the country’s banking and insurance regulator said.

The average comprehensive solvency ratio of the 181 insurers reviewed at a regulatory meeting was 212 percent by the end of September, and their average core solvency ratio was 139.7 percent, said the China Banking and Insurance Regulatory Commission.

The sector’s solvency ratio has remained within an appropriate range, and the risks are generally controllable, the commission added.

Specifically, the average comprehensive solvency ratio of property insurance companies, life insurance companies and reinsurance companies stood at 238.9 percent, 204 percent and 309.1 percent, respectively.

The solvency ratio is a key metric of an insurer’s ability to meet its debt and other obligations. The commission said it will tighten oversight on the sector to fend off financial risks.

China's Insurance Market

The China Insurance Market can be segmented by Type into Life Insurance and Non-Life Insurance. Non-Life Insurance can be further segmented into Health Insurance, Accident Insurance, Air Travel Insurance, Dental Insurance, and Other Non-Life Insurance.

  • The technology boom has hit China especially fast. The China’s general insurance industry is forecast to grow by 3.8% in 2023, compared to 5.7% registered in 2019. Enabled by the rapid increase in mobile and internet users, tech firms have created large-scale ecosystems serving a community with strong online consumption habits and a heavy reliance on mobile devices. These online ecosystems have come to symbolize the Chinese tech scene and are significant contributors to the economy. The fast increase in the number of tech companies and the rapid growth of online ecosystems are based on strong encouragement of innovation and support for entrepreneurship. The most established tech firms have created online ecosystems that encompass all aspects of life, ranging from e-commerce to lifestyle services to financial services. They have reached scales that are large even by global standards.
  • Buying personal insurance online is becoming more popular in China, with premiums increasing by 13.6% year on year. personal insurance premiums coming from online channels totalled $43.5 billion. Health insurance grew the fastest, with premiums increasing by 58.8%. This was most likely due to increased concerns regarding health among the public due to the COVID-19 pandemic.
  • The share of online insurance premiums is expected to grow even further in the coming years, as technological innovation and e-commerce continue to develop in China. Insurers will become increasingly active in deploying new digital technologies to reinforce their long-term competitive edge, after the pandemic forced them to re-evaluate their digital capabilities in handling sales, underwriting, risk assessment and claims. China’s insurance regulator is expected to introduce additional measures to oversee the online insurance market in order to rein in risks and protect both insurer’s financial soundness and consumers’ interests.

by Nataly Kramer