GlobalData Predicts 7% Growth In Chinese Insurance Market by 2026

Big growth ahead for Chinese insurance brands says GlobalData and IE agrees. As woke EU and US insurers withdraw from insuring infrastructure, industrial, carbon energy and other non-WEF approved economic activities, there can be only one winner. Not only will Chinese insurers prosper in their home market, but the pickings from around the developed world be be rich indeed.

The best strategy for UK insurers already covering high carbon usage industries is probably to partner with Chinese underwriters and major players in the long term. Otherwise the industry needs to accept it’s going to lose billions in premium revenues long term.

Here’s the word;

The Chinese general insurance market is set to grow at a compound annual growth rate (CAGR) of 7.2% from CNY1,367.7 billion ($212.1 billion) in 2021 to CNY1,943.1 billion ($304.4 billion) in 2026, in terms of direct written premiums (DWP), forecasts, GlobalData, a leading data and analytics company.

According to GlobalData, the Chinese general insurance industry is expected to recover in 2022 and continue its growth trend over the next five years after registering a low growth of 0.7% in 2021 due to a decline in motor insurance as supply chain disruptions and stringent lockdowns in the major manufacturing hubs of Shanghai and Changchun led to a fall in vehicle sales.

Shabbir Ansari, Senior Insurance Analyst at GlobalData, comments: “The low growth in 2021 was primarily attributed to strict lockdowns due to China’s zero-COVID policy. Lower vehicle sales also impacted general insurance growth as motor insurance accounts for more than 50% of general insurance premiums.”PR_Chart_China_General Insurance.png

Motor insurance was the largest line within the Chinese general insurance market, accounting for 56.8% share in terms of DWP in 2021. The segment is expected to recover from 2023 as automobile sales are expected to improve due to the proposed extension of subsidy for electric vehicles till 2023. Electric vehicles constituted nearly 20% of total vehicles sold in China in 2021.

Ansari adds: “The expected increase in the sales of electric and hybrid vehicles, which have 20% higher premium compared to internal combustion engine vehicles, will help the motor insurance segment to recover from 2023 to grow at a CAGR of 2.4% over 2021-26.”

Personal Accident and Health (PA&H) insurance was the second largest general insurance line in China, accounting for a 14.7% share in terms of DWP in 2021. PA&H insurance is expected to continue its double-digit growth over the forecast period, driven by raising awareness over protection and financial planning due to recurring COVID-19 waves.

Ansari continues: “Rising medical costs will drive premiums, which will also support the growth of PA&H insurance. As a result, PA&H insurance is forecast to grow at a CAGR of 15.6% over 2021-26.”

Property insurance was the third-largest line, accounting for a 12.7% share of general insurance premiums in China in 2021. Property insurance is expected to grow at a CAGR of 12.4% during 2021-26, driven by the Chinese government’s plans to invest more than $1 trillion in infrastructure projects, including high-speed rail networks, renewable energy projects, and water tunnels, which are expected to be completed by 2030, will boost property insurance.

Liability, Financial Lines, Marine, aviation and transit (MAT), and Miscellaneous insurance accounted for the remaining 15.8% share in 2021.

Ansari concludes: “The expected recovery in automobile sales, growing health awareness and increased investments in infrastructure projects will support general insurance growth in China. However, rising inflation will increase the cost of claims impacting profit margins of insurers.”

About alastair walker 12570 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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