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Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including Daily Alerts, monthly regional Insights, and in-depth quarterly Country Forecast Reports.

China Insurance Report Q2 2014

Published by Business Monitor International on Feb 12, 2014 - 71 pages
PDF - Download Now with 3 Quarterly Updates format - Download Now
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In spite of the slowing growth of China's economy, trends and developments in the non-life segment will underpin a very solid expansion of the insurance sector through the forecast period. Life insurance premiums should achieve double-digit growth in 2014 as well.

BMI's new insurance report format provides forecasts of the life and non-life markets, including gross and net premiums, reinsurance premiums and assets. Moreover, it provides forecasts for key growth drivers such as vehicle fleet size, demographic factors and private health expenditure. The report also contains a comprehensive breakdown of the non-life insurance market, providing forecasts for motor and transport insurance, property, personal accident, health, general liability and credit insurance. Finally, the new report offers a detailed breakdown of the life and non-life competitive landscapes, covering the top companies present in each segment by premiums and market share.

The past slowing of the economy appears not to have had a material impact on the overall fortunes of the non-life segment, where official data indicates that premiums (including health insurance and personal accident lines) have been rising at an annual rate of around 13%. In essence, the non-life companies have responded to the more difficult economic environment by cross-selling, developing new distribution channels such as telemarketing and introducing new products. Government measures to boost usage of insurance in rural areas have also been beneficial. Particular regional markets within China have been very competitive. However, many of the leading non-life companies are actively working to boost customer service (eg with claims handling) and/or to lift underwriting profits. Looking forward, it is clear that the development of health insurance will be a key driver of growth.

In the life segment, gross written premiums contracted during calendar 2011. As of early, it is clear that they have returned to growth. The restrictions on bancassurance sales that were imposed by the China Banking Regulatory Commission (CBRC) remains a challenge. So too does competition from wealth management products, which are originated and distributed by the banks. Nevertheless, the latest reports from the leading Chinese life insurance companies in relation to their operations in H113 suggest that they are lifting new business sales and/or profitability. As is the case in the non-life segment, the life companies are introducing new products, developing new distribution channels and doing what they can to boost sales through existing channels. Several companies have indicated that they have been able to achieve meaningful growth (by some metrics and across at least some of their businesses) by developing the agency channel at a time of (sharply) reduced sales through the bancassurance channel. Meanwhile, most of the foreign companies that are active in China's life segment are growing sales and/or profitability - in many cases because they are focusing on geographic or product niches.

Over the last two years , the China Insurance Regulatory Commission (CIRC) enhanced the rules governing sales by life companies (especially). This should strengthen the reputation of life insurance as a conduit for organised savings over the long-term. CIRC has also liberalised the rules governing investment by insurance companies - which will provide new opportunities at a time of low interest rates and often volatile financial markets.

Key BMI Forecasts
  • Total gross premiums will rise by 13.7% to US$302.7bn in 2014.
  • In the life segment, total gross premiums will increase by 13.8% to US$166.8bn over 2014.
  • In the non-life segment, total gross premiums will grow by 13.6% to US$135.9bn over 2014.
  • Within the non-life segment personal accident insurance premiums will rise by 10.3% to US$7.4bn over 2014.
  • Health insurance premiums will expand by 12.7% to US$17.3bn over 2014.

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