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Insurance - China - July 2017

“China contributes over half of the world’s insurance market growth, which is mainly driven by the strong wealth management demand of domestic investors. But that’s just part of the story. Insurance buyers, especially young people, have started to recognise insurance’s true value of risk management, reflecting the growing acceptance of term insurance products (eg well-being insurance). Opportunities lie among lower tier city consumers who are still in the early stage of gaining insurance knowledge.”

- Aaron Guo, Senior Analyst, China

This report will cover the following areas:

  • How long will the rush to buy insurance in HK last?
  • How has the sales channel been evolving in the insurance market?
  • Where are the opportunities for overseas insurers?

The Chinese insurance market has witnessed a number of new developments in the past two years. The sudden trend of going to Hong Kong to buy insurance, insurance companies investing huge amounts in the security market, and a growing number of regulations have all put the market in the spotlight.

Mintel discusses these phenomena and what they mean for insurance companies in this report, through looking into the attitudes and purchasing behaviours of consumers. Other issues including the future of the insurance market, where opportunities lie and how insurers can better compete are also addressed.

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
        • Excluded
        • Executive Summary

            • The market
              • Figure 1: Contributions to the global insurance market growth, by regions, 2016
              • Figure 2: Best- and worst-case forecast of total Chinese insurance market value, 2012-22
              • Figure 3: Segmentation of non-life insurance, 2011-16
              • Figure 4: Insurance penetration and density of Chinese market comparing to world average, 2011-16
            • Companies and brands
              • Figure 5: Insurance product and service development dimensions
            • The consumer
              • Market growth comes from premiums paid and lower tier cities
                • Figure 6: Insurance products purchased in the last two years, March 2017
              • More of a family decision
                • Figure 7: Responsibility for insurance purchase, March 2017
              • Word-of-mouth reputation weighs more than direct sales
                • Figure 8: Insurance purchase drivers, March 2017
              • Importance of company characteristic differs by city tier
                • Figure 9: Requirements of insurance companies, by city tier, March 2017
              • Repayment is more important than payment
                • Figure 10: Important features of insurance products, March 2017
              • The trend of returning to the nature of insurance
                • What we think
                • Issues and Insights

                  • How long will the rush to buy insurance in HK last?
                    • The facts
                      • The implications
                        • How has the sales channel been evolving in the insurance market?
                          • The facts
                            • The implications
                                • Figure 11: AIG’s driving habit scoring app
                              • Where are the opportunities for overseas insurers?
                                • The facts
                                  • The implications
                                  • The Market – What You Need to Know

                                    • A market that is rapidly catching up
                                      • Life insurance expands slightly faster than non-life
                                        • The internal and external drivers of the insurance market
                                        • Market Size and Forecast

                                          • China accounts for half of the global insurance market’s growth
                                            • Figure 12: Contributions to global insurance market growth, by regions, 2016
                                          • China expected to become the world’s second largest insurance market
                                            • Figure 13: Market share of each country in global insurance market, by direct premium income, 2016
                                          • Closing the gap in insurance penetration and density
                                            • Figure 14: Insurance penetration and density of Chinese market comparing to world average, 2011-16
                                          • Chinese market estimated to exceed RMB 4,000 billion in 2017
                                            • Figure 15: Best- and worst-case forecast of total insurance market value, 2012-22
                                        • Market Factors

                                          • Demand for wealth management
                                            • Figure 16: USD-RMB exchange rate in the last two years
                                          • Evolving population structure
                                            • Figure 17: The proportion of specific population group, 2006-16
                                          • Better industry regulation
                                            • Increasing knowledge of insurance buyers in China
                                              • Support of technology
                                                • Figure 18: Products introduced by insurance companies on Licaitong (highlighted with red border)
                                              • Increased cyber risk offering new growth opportunities
                                              • Market Segmentation

                                                • Life insurance accounts for over half the total insurance market
                                                  • Figure 19: Best- and worst-case forecast of life insurance market value, 2012-22
                                                • Non-life insurance is expected to grow at a CAGR of 19.0%
                                                  • Figure 20: Best- and worst-case forecast of non-life insurance market value, 2012-22
                                                • Well-being insurance as the key driver of non-life insurance
                                                  • Figure 21: Segmentation of non-life insurance, 2011-16
                                              • Key Players – What You Need to Know

                                                • Life and non-life segments in different competitive landscape
                                                  • Pressure in product development and management
                                                    • Every touch point could be where innovation happens
                                                    • Market Share

                                                      • Leading life insurers are losing share to smaller companies
                                                        • Figure 22: Market share of leading life insurance companies, 2013-16
                                                      • Relatively stable non-life insurance segment
                                                        • Figure 23: Market share of leading non-life insurance companies, 2013-16
                                                      • The aggressive Anbang Group
                                                      • Competitive Strategies

                                                        • Enlarging the proportion of equity investment to ensure earnings ratio
                                                          • Figure 24: Types of investments made by insurance companies, 2013-16
                                                        • Product and service expansion
                                                          • Figure 25: Product and service development dimensions
                                                        • Integrated internet sales channels
                                                          • Figure 26: Penetration of internet insurance sales channels, 2012-16
                                                        • Internet insurance company
                                                        • Who’s Innovating?

                                                          • The P2P insurance concept
                                                            • Figure 27: Illustration of P2P insurance by Friendsurance
                                                          • Creative insurance advertisements
                                                            • Figure 28: Geico Unskippable
                                                          • Choose your agent
                                                          • The Consumer – What You Need to Know

                                                            • Evolving product preference and inclusive decision-makers
                                                              • Direct sales result varies between different products
                                                                • Gaps exist between different insurance buyer groups
                                                                • Insurance Products Purchased

                                                                  • Growth coming from premiums paid and lower tier cities
                                                                    • Figure 29: Insurance products purchased in the last two years, March 2017
                                                                  • Medical and life insurance move up in rank
                                                                    • Figure 30: Top five purchased insurance products, July 2015 versus March 2017
                                                                  • Tier one consumers buy more types of insurance
                                                                    • Figure 31: Differences between tier 1 and tier 2 and 3 (as benchmark) insurance buyers on the products purchased, March 2017
                                                                  • Purchase behaviours differ between educational levels
                                                                    • Figure 32: Insurance products purchased in the last two years, by educational level, March 2017
                                                                  • Opportunity for home and contents insurance
                                                                    • Unconvinced 40-49-year-olds
                                                                    • Insurance Purchase Responsibility

                                                                      • More decision makers when it impacts the whole family
                                                                        • Figure 33: Responsibility in insurance purchase, March 2017
                                                                      • Different focus of males and females
                                                                        • Figure 34: Differences between males and females on the claim rates of ‘I am the only decision maker’ on the selected insurance products, females as benchmark, March 2017
                                                                      • More of a family decision in lower tier cities
                                                                        • Figure 35: Differences between tier one and tier two to three (as benchmark) city insurance buyers on the claim rates of ‘I am the only decision maker’ and ‘I made the decision with my family members’, March 2017
                                                                      • Different behaviours of workers from different companies
                                                                        • Figure 36: Average responsibility in the purchase of selected insurance products, by company type, March 2017
                                                                    • Insurance Purchase Drivers

                                                                      • Needs drive purchase, word-of-mouth valued
                                                                        • Figure 37: Insurance purchase drivers, March 2017
                                                                      • Proactively over passively
                                                                        • Figure 38: Proportion of passive insurance buyers, by insurance product type purchased, March 2017
                                                                      • Lack of persuasive power in sales of accident insurance
                                                                        • Figure 39: Insurance purchase drivers, by product type, March 2017
                                                                      • Tier one city life insurance buyers value professional advice
                                                                      • Requirements of Insurance Companies

                                                                        • Service over product
                                                                          • Figure 40: Requirements of insurance companies, March 2017
                                                                        • Families with child(ren) are looking for more products
                                                                          • Tier one city consumers focus on reputation
                                                                            • Figure 41: Requirements of insurance companies, by tier 1 and tier 2 and 3 cities, March 2017
                                                                        • Important Features of Insurance Products

                                                                          • Coverage and claims policy
                                                                            • Figure 42: Important features of insurance products, March 2017
                                                                          • Sum insured is more important than premium
                                                                            • Overseas insurance buyers are mainly high earners from lower tier cities
                                                                            • Attitudes towards Insurance

                                                                              • 40 years of age a dividing line in insurance perception
                                                                                • Figure 43: Insurance purchase perception, by age group, March 2017
                                                                              • Returning to the nature of insurance
                                                                                • Figure 44: Insurance feature perception, March 2017
                                                                                • Figure 45: Regard insurance as a tool of risk control or wealth management, by age and city tier, March 2017
                                                                                • Figure 46: Insurance products purchased, by insurance feature perception, March 2017
                                                                              • High preference for domestic products
                                                                                • Figure 47: Insurance company preference, March 2017
                                                                              • Young people show higher interest in term insurance
                                                                                • Figure 48: Insurance type preference, March 2017
                                                                                • Figure 49: Insurance type preference, by insurance feature perception, March 2017
                                                                              • Limited willingness to switch insurance companies
                                                                                • Figure 50: Willingness to switch, March 2017
                                                                            • Meet the Mintropolitans

                                                                              • MinTs buy significantly more travel insurance than Non-MinTs
                                                                                • Figure 51: Insurance products purchased in the last two years, by MinTs and Non-MinTs, March 2017
                                                                              • MinTs buy life and accident insurance with their families
                                                                                • Figure 52: Proportion of MinTs and Non-MinTs who hold the main responsibly for insurance purchase, March 2017
                                                                              • MinTs are more demanding
                                                                                • Figure 53: Requirements of insurance companies, by MinTs and Non-MinTs, March 2017
                                                                              • MinTs prefer insurance products with overseas investment features
                                                                                • MinTs have the same preference as majority insurance buyers
                                                                                • Appendix – Market Size and Forecast

                                                                                    • Figure 54: Total market value of insurance, 2012-22
                                                                                • Appendix – Market Segmentation

                                                                                    • Figure 55: Total market value of life insurance, 2012-22
                                                                                    • Figure 56: Total market value of non-life insurance, 2012-22
                                                                                • Appendix – Methodology and Abbreviations

                                                                                  • Methodology
                                                                                    • Fan chart forecast
                                                                                      • Abbreviations

                                                                                      Companies Covered

                                                                                      To learn more about the companies covered in this report please contact us.

                                                                                      Insurance - China - July 2017

                                                                                      US $3,990.00 (Excl.Tax)