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Insurances - China - November 2015

“The insurance market is forecast to grow steadily at a CAGR of 8.4% over 2015-20. The market is quite concentrated and is dominated by the domestic insurance companies. However, competition in the market is becoming more severe. Thanks to policy change, insurance companies are now entitled to attract consumers with more competitive prices and more product innovation.”

– Linda Li, Senior Research Analyst

This report covers the following issues:

  • Insurers need to pay more attention to their services to differentiate themselves and increase loyalty
  • Foreign issuers can increase brand awareness to win more customers
  • Simple and more affordable insurance products have the potential to grow

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
          • Figure 1: Definition of low/middle/high income groups, by city tier
      • Executive Summary

          • The market
            • Figure 2: Premium income in China, 2010-20
          • Companies and brands
            • Figure 3: Premium share of top 10 companies in life insurance sector, 2013-15 August
            • Figure 4: Premium share of top 10 companies in non-life insurance sector, 2013-15 August
          • The consumer
            • Great potential in accident insurance
              • Figure 5: Insurance products bought in the last two years, July 2015
            • Education is crucial for converting non-buyers
              • Figure 6: Reasons for not buying certain insurance, July 2015
            • Insurance agents dominate the purchase channel, but internet channel is catching up
              • Figure 7: Purchase channels of insurance products, July 2015
            • People around me and insurance agents are most important influencers
              • Figure 8: Information sources used when buying insurances, July 2015
            • Product design comes first; insurer brand and services are secondary
              • Figure 9: Consideration factors when choosing insurance products, July 2015
            • Chinese consumers have low brand loyalty to insurers
              • Figure 10: Selected attitudes towards insurance, July 2015
            • Meet the Mintropolitans
              • What we think
              • Issues and Insights

                • Insurers need to pay more attention to their services to differentiate themselves and increase loyalty
                  • The facts
                    • The implications
                      • Foreign issuers can increase brand awareness to win more customers
                        • The facts
                          • The implications
                            • Simple and more affordable insurance products have the potential to grow
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • Insurance market is starting to grow, led by the life insurance sector
                                    • Motor insurance is the biggest segment in the non-life insurance sector
                                      • Government support in insurance ensures the continuous growth
                                      • Market Size and Forecast

                                        • Insurance market has started to boost
                                          • Figure 11: Insurance premium income in China, 2010-15
                                          • Figure 12: Insurance density in China, 2010-14
                                        • Insurance premium is forecast to grow at a CAGR of 10.1% over 2015-20
                                          • Figure 13: Insurance premium income in China, 2010-20
                                      • Market Factors

                                        • Drivers
                                          • Government support in insurance ensures continuous growth
                                            • Innovations in both insurance products and selling channels
                                              • The marketization of insurance premium and yield rate
                                                • Challenges
                                                  • The credibility of insurance companies in China needs improvement
                                                    • The number of actuaries may not satisfy the rapid growth of insurance industry
                                                    • Market Segmentation

                                                      • Life insurance leads to the growth of the insurance industry since 2014
                                                        • Figure 14: Benchmark lending and deposit rate in China, October 2010-October 2015
                                                        • Figure 15: Premium income of life insurance in China, 2010-20
                                                      • The growth of non-life insurance sector has slowed down
                                                        • Figure 16: Non-life insurance premium income in China, by segment, 2010-15
                                                      • Motor insurance is likely to benefit from consumer interest in buying more expensive cars
                                                        • The well-being segment enjoys the fastest growth
                                                          • Growth forecast of non-life insurance segment
                                                            • Figure 17: Non-life insurance premium income, 2010-20
                                                        • Key Players – What You Need to Know

                                                          • The Chinese insurance market is concentrated, and is dominated by domestic insurers
                                                            • Insurance companies are using more digital platforms to sell and promote their products and services
                                                              • The fast development of internet finance has raised opportunities for insurance companies
                                                              • Market Share

                                                                • The Chinese insurance market is dominated by domestic companies
                                                                  • The competition in the life insurance sector is getting more severe, making the sector less concentrated
                                                                    • Figure 18: Value share of premium income in life insurance market, China, 2013-15
                                                                  • Stable company performance in non-life insurance
                                                                    • Figure 19: Value share of premium income in the non-life insurance market, China, 2013-15
                                                                • Competitive Strategies

                                                                  • Insurance companies launch more specific insurance types to engage consumers
                                                                    • Leveraging the digital methods to promote insurance sales
                                                                      • Mobile apps
                                                                        • Social media
                                                                          • Using the fast growth of internet finance to sell insurance products
                                                                            • Encourage health insurance sales by answering consumers’ growing interest in exercising
                                                                                • Figure 20: Bu Bu Bao Program from Zhong An Insurance
                                                                            • Who’s Innovating?

                                                                              • Online-only insurance company has emerged
                                                                                • Leveraging the social media network to attract consumers
                                                                                  • Usage-based Insurance – A new way to calculate premiums
                                                                                  • The Consumer – What You Need to Know

                                                                                    • Income drives insurance purchase
                                                                                      • Insurance agent plays the most critical role in insurance selling
                                                                                        • Consumers call for more guidance and help from insurance companies
                                                                                          • Insurance companies have not developed brand loyalty among consumers
                                                                                            • Insurance is not only a protection but also a financial management tool to Chinese consumers
                                                                                            • Insurance Products Bought in the Last Two Years

                                                                                              • Accident insurance is gaining importance
                                                                                                  • Figure 21: Insurance products bought in the last two years, July 2015
                                                                                                • Demand for insurance is driven by income
                                                                                                  • Figure 22: Insurance products bought in the last two years, “I have bought this for myself”, by income group, July 2015
                                                                                                • Consumers start to buy more insurance products as they get married
                                                                                                  • Figure 23: Insurance products bought in the last two years, by marital status, July 2015
                                                                                                • Promising future for education insurance
                                                                                                • Reasons for Not Buying Insurance

                                                                                                  • Non-buyers tend to think “it won’t happen to me” about accident insurances and home and contents insurance
                                                                                                    • Figure 24: Reasons for not buying accident insurance and home and contents insurance, July 2015
                                                                                                  • Consumers call for more guidance about choosing a suitable product
                                                                                                    • Considerable number of consumers do not believe in insurance
                                                                                                      • Figure 25: Reasons for not buying certain insurance products, July 2015
                                                                                                  • Purchase Channels

                                                                                                    • Insurance agent still dominates purchase channels
                                                                                                      • Figure 26: Purchase channels of insurance products, July 2015
                                                                                                    • Potential to sell more motor insurance, home and contents insurance and accident insurance products online
                                                                                                      • Figure 27: Selected purchase channels of insurance products, July 2015
                                                                                                  • Information Sources Used When Buying Insurance

                                                                                                    • Personal advice from friends and agents are most valued
                                                                                                      • Figure 28: Information sources used when buying insurances, July 2015
                                                                                                    • Consumers with higher income refer to more information sources
                                                                                                      • Figure 29: Information sources used when buying insurances, by household income, July 2015
                                                                                                    • Most consumers refer to fewer than three types of channels
                                                                                                      • Figure 30: Repertoire of information sources people refer to when buying insurance products, July 2015
                                                                                                  • Consideration Factors When Buying Insurance Products

                                                                                                    • Product design comes first; insurer brand and operation processes are nice-to-have features
                                                                                                      • Figure 31: Consideration factors when choosing insurance products, July 2015
                                                                                                    • Consumers call for more comprehensive insurance products
                                                                                                      • High yield insurance products to attract consumers of lower income
                                                                                                        • Consumer loyalty is low
                                                                                                        • Attitudes towards Insurance

                                                                                                          • Insurance is more likely an investment product to Chinese consumers
                                                                                                            • Figure 32: Selected attitudes towards insurance, by age and monthly household income, July 2015
                                                                                                          • Improve transparency when selling insurance products
                                                                                                            • Figure 33: Selected attitude towards insurances, July 2015
                                                                                                            • Figure 34: Selected attitudes towards insurances, July 2015
                                                                                                          • Consumers have low brand loyalty in insurance, giving opportunities for foreign issuers to grab share
                                                                                                            • Figure 35: Selected attitudes towards insurance, by age and monthly household income, July 2015
                                                                                                        • Meet the Mintropolitans

                                                                                                          • Mintropolitans buy more types of insurance products
                                                                                                            • Figure 36: Insurance products bought in the past two years, “I bought it for myself”, by consumer classification, July 2015
                                                                                                          • Offer more tailored products to attract MinT
                                                                                                            • Figure 37: Consideration factors of buying insurance products, by consumer classification, July 2015
                                                                                                          • Mintropolitans refer to more information channels when buying insurance products
                                                                                                            • Figure 38: Information channels used when buying insurance products
                                                                                                          • Mintropolitans are pioneers of innovative insurance products
                                                                                                          • Appendix – Market Size and Forecast

                                                                                                              • Figure 39: Forecast of premium income in China, by segment, 2010-20
                                                                                                          • Appendix – Market Segmentation

                                                                                                              • Figure 40: Premium income of motor insurance in China, 2010-20
                                                                                                              • Figure 41: Premium income of well-being insurance in China, 2010-20
                                                                                                              • Figure 42: Premium income of commercial insurance in China, 2010-20
                                                                                                          • Appendix – Methodology and Abbreviations

                                                                                                            • Methodology
                                                                                                              • Fan chart forecast
                                                                                                                • Mintropolitans
                                                                                                                  • Why Mintropolitans?
                                                                                                                    • Who are they?
                                                                                                                      • Figure 43: Demographic profile of Mintropolitans vs Non-Mintropolitans, by gender, age and personal income
                                                                                                                      • Figure 44: Demographic profile of Mintropolitans vs Non-Mintropolitans, by marital status, city tier and education level
                                                                                                                    • Abbreviations

                                                                                                                    Companies Covered

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

                                                                                                                    Insurances - China - November 2015

                                                                                                                    £3,273.18 (Excl.Tax)