China: Online insurance mart to exceed US$58 bln by 2019

22 Apr 2015
The online insurance market in China is forecast to grow to at least CNY364.5 billion (US$58.76 billion) by 2019, as the Internet transforms the way insurance is sold.

A recent report by Ping An Securities said: “If, in the next five years, property and casualty insurance premiums grow at 15% per year, the annual insurance premiums in 2019 are expected to reach CNY1.215 trillion. If online insurance covers 30% of the market, the online market space would be CNY364.5 billion."
According to statistics released by the China Insurance Regulatory Commission, China's insurers recorded total premium income of over CNY2 trillion in 2014, with growth of 17.5% over 2013. Premiums from life insurance policies sold online surged 548.51% to CNY35.32 billion, while those from non-life insurance rose by 113.65% to CNY50.6 billion.
Mr John Cai, CEO of AIA China, told the Nanfang Daily newspaper: “In recent years, the development of Internet finance has accelerated, and this will have a huge impact on the insurance customer. If the insurance sales process is complicated for the customer, or if he experiences poor service, this will be known very quickly (through the Internet) and force the insurance company to make big changes.”
Mr Cai expects the Internet to have a disruptive impact on the entire insurance industry. “Any complex or difficult-to-understand laws or regulations governing traditional insurance products will become increasingly simplified.”
There are four types of Internet distribution modes in the Chinese insurance sector:
  • the self-owned platform of a traditional insurer, such as China Life's e-Home and Ping An's Online Mall;
  • a wholly online insurer, namely, Zhong An Insurance;
  • a professional third-party insurance intermediary platform that is set up by insurance brokers or agencies, such as Ubao and Zhongmin; and
  • a general e-business platform, such as Taobao and Suning.
The Chinese government is keen on promoting online finance to push financial institutions to accelerate reforms and boost economic growth.
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