Life and Non-life Insurance Market in China - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Life and Non-Life Insurance Market in China is estimated at USD 678 billion during the current year and is poised to grow at a CAGR of less than 6% during the forecast period.

China is the world's second-largest insurance market after the United States. The China Banking and Insurance Regulatory Commission allowed foreign investors to raise their stakes in life insurance companies to 100% from January 1, 2020, from the previous ceiling of 51%, the removal of the ownership cap to enhance the effectiveness of foreign-owned insurers in formulating and executing their business strategy in terms of product offerings, risk management, asset-liability management, corporate governance, and investment allocation approach. Greater participation from institutional investors focused on long-term investment outcomes may help diversify the domestic capital markets and reduce dependency on retail investors.

The impact of COVID-19 on life insurance is mixed. The economic slowdown and implementation of stringent containment measures are hindering agent sales. However, the demand will benefit from the rising risk awareness and increasing focus on protection products, as volatility in the financial markets is undermining the appeal of savings products. Insurers are fast adopting digital channels in lieu of face-to-face sales and accelerating product development to better align with public demand for protection. Overall, life premium growth is expected to average around 2% this year before picking up too close to 10% in 2021. Non-life insurance premiums continued to grow strongly in 2019 (+11.8%). Health, guarantee, agricultural, and liability insurance outperformed. Supportive government policies are a key driver behind the growth of agricultural and liability insurance. In contrast, motor premium growth slowed to below 2% in 2019.

China Life & Non-life Insurance Market Trends

Increase in the Number of Insurance Companies is Driving the Market

The number of insurance companies is increasing in the market. The number might increase further, as China’s insurance regulatory commission had allowed FDI investments in insurance up to 100%. The revision of insurance regulations will attract more market participants in the sector, stimulate market strength, push Chinese and foreign-invested financial institutions to improve their competitiveness and benefit China by learning from advanced international ideas and experience. The further opening of China and establishing a fair market environment will greatly help promote full competition in the Chinese insurance sector, improve the shareholding structure of related financial institutions, regulate shareholder behaviour, and form a rational and diversified market system.

Increase in Insurtech Funding Transactions

There are 122 insurance tech startups in China. The Chinese insurance market doubled over the past six years. However, insurance penetration is comparatively less in developed markets, with approximately 3.5%-4%. Zhong An Online P&C Insurance offers online property and casualty insurance services. It is China’s first online-only insurer, whose initial investors included Alibaba’s finance arm, Tencent, and Ping An Insurance (Group) Co. The largest shareholder is Alibaba affiliate Zhejiang Ant Small & Micro Financial Services Group. Zhong An developed more than 100 products and sold 1.6 billion insurance policies for more than 250 million customers since commencement. The company also has a license for motor insurance. Insurtech companies are increasing across countries, where a variety of technologies are set to transform the traditional insurance industry. Many insurers have already transformed themselves digitally to offer convenience, security, choice, and comparison to their customers.

China Life & Non-life Insurance Market Competitor Analysis

The report covers the major players operating in the life and non-life insurance market in China. The market is consolidated, and the major market share is held by a few companies. The life and non-life insurance market is likely to grow during the forecast period, due to the step taken by the government to deregulate and increase FDI in insurance. Companies including China People’s Insurance Group Co, China Life Insurance (Group) Co., China Ping An Insurance (Group) Co., and China Pacific Insurance, among others have been profiled in the report.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support