Market Report, "China Insurance Report Q1 2015", published

From: Fast Market Research, Inc.
Published: Fri Dec 12 2014

We expect growth in China's insurance sector to remain on an uptrend in the coming years due to the under-penetrated nature of the industry. However, increasing saturation in tier-one cities will push insurers to expand into lower tier cities. The ongoing liberalisation of the healthcare sector will unleash new growth opportunities within the health insurance sub-segment.

We forecast total gross premiums to slowdown in 2015 after growing by strong double-digit rates in 2014. We anticipate growth in premiums to come in at 5.5% (in USD terms) in 2015 versus 15.3% in 2014. The slowdown in the market is inevitable after strong double-digit expansion in each of the past three years. Furthermore, it is in line with our Country Risk team's view that the ongoing weakness in the Chinese economy will continue in the coming months, which will inevitably weigh on premiums.

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Among the BRICS, China has the second lowest life insurance density after India. This in itself attests to the still under-penetrated nature of the segment, which will manifest into growth opportunities for life insurers. Indeed, we expect life density to increase from USD132.7 per capita in 2015 to USD158.3 per capita in 2018. As with many other emerging markets, life insurance in China is slowly becoming a key conduit of organised savings - in a country where savings are consistently greater than investment.

We believe that the increasing saturation in tier-one cities will push life insurers to expand into lower tier cities. Furthermore, we see the ongoing urbanisation of the country acting as a tailwind for firms as they can expand into newly created cities to broaden their customer base. This leads us to forecast growth in the life segment to outperform the non-life segment over the 2015-2018 period. We expect gross life premiums to grow at an annual average of 6.7% (in USD terms) over the 2015-2018 period to reach USD225.2bn by 2018.

China's non-life insurance penetration is currently at...

The China Insurance Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.

BMI's China Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Chinese insurance industry.

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