China’s life insurance industry to reach $665.6 billion in 2026: GlobalData – Reinsurance News

China’s life insurance industry is expected to grow from 3.1 trillion yuan ($484.4 billion) in 2021 to 4.25 trillion yuan ($665.6 billion) in 2026, at a compound annual growth rate (CAGR) of 6.3%. Insurance Premium (DWP) and GlobalData said.

According to the data and analytics company, this growth is underpinned by a recovery in agency distribution channels and product innovations that address changing demographic requirements.

Together with the Chinese life insurance industry, China’s non-life insurance market is expected to grow similarlyGlobalData reported in October.

The national property and casualty insurance market will grow at a compound annual growth rate (CAGR) of 1,367.7 billion yuan ($212.1 billion) in 2021 to 1,943.1 billion yuan ($304.4 billion) in 2026 in terms of direct premiums written. It is expected to grow at 7.2%. (DWP).

According to GlobalData’s Global Insurance Database, agent and bank insurance are the main channels for life insurance sales in China, accounting for 60.1% and 30% share of new business DWP in 2021, respectively.

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The agency channel registered 2.2% growth last year and bancassurance registered 3.9% growth, driven by insurers’ investments to improve the quality of advisory services through training.

Deblina Mitra, Senior Insurance Analyst at GlobalData, commented:

“More than 85% of China’s high net worth (HNW) investors prefer life insurance in their estate planning, which is one of the main drivers of whole life insurance. % growth, which is expected to boost demand for life insurance.”

According to Global Data, China’s life insurance industry is also benefiting from rising demand for personal accident and health (PA&H) insurance due to private healthcare facilities and rising disposable incomes. Life insurance accounted for a 24.5% share of his DWP in 2021, and his CAGR from 2017-21 was his 13.8%.

Hybrid insurance products that combine healthcare and protection with savings are also gaining traction in the country. Mitra added:

“Whole life insurance and annuities with riders such as critical illness and accident are other examples of hybrid insurance products in China. of the aging population are the primary consumers of these products.”

Furthermore, in April 2022, China introduced individual private pensions as part of the third pillar of pensions to address the income challenges faced by the elderly. According to GlobalData, the third pension pillar will allow individuals to contribute up to RMB 12,000 ($1,872) annually, which is tax-free and can be invested in products such as commercial funds from life insurance companies. I can do it.

Mitra says: The new pension scheme has opened up untapped opportunities for insurers. ”

Moreover, in 2021, a number of foreign insurers such as Allianz and Manulife have shown strong interest in the pension sector, especially after the removal of foreign direct investment (FDI) caps on insurance.

Mitra concludes:

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