China Insurance Report Q2 2016
BMI View: China's insurance market continues to present enormous growth potential. Although thevolumes of premiums written in both the life and non-life sector are high, actual rates of penetration anddensity remain low and coverage is limited, particularly in rural areas of the country where access toformal financial services is in many cases still underdeveloped. Household income rates continue to riseand while economic growth has slowed, China's economy remains one of the fastest growing globally,supporting our forecasts for healthy growth in insurance premiums. Other positive structural trends, suchas an expanding and ageing workforce and strong rate of urbanisation also underpin strong growthforecasts.
Key Updates And Forecasts
The life insurance market in China is large, writing premiums of around USD193bn in 2016, growth of5.1% compared to 2015. Recent volatility in the stock markets will likely dampen demand for investmentlinked products, however underlying trends, including a large and ageing population, mean that long-termdemand will continue to rise.
Throughout the forecast period through to 2020, growth will be stronger in the non-life sector, wherepremiums are forecast to grow by around 11.7% annually between 2016 and 2020. Much of this growthwill be driven by the large motor insurance sector, though health insurance is also a key growth area,along with personal accident insurance.
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