Insurers in China will likely find more success in the coming years
China’s insurance industry has been experiencing rapid growth over the past few years and this growth is expected to accelerate, according to the China Insurance Regulatory Commission. As consumers throughout the country become more affluent, the demand for insurance coverage is beginning to rise. More people are purchasing coverage and insurers are pulling in more revenue from premiums. These premiums are likely to account for a significant portion of China’s gross domestic product in the coming years.
Report highlights the growth of premiums throughout the country
A new report from the China Insurance Regulatory Commission predicts that consumers will spend an average of $570 per month in insurance premiums by 2020, making the Chinese market the second largest in the insurance industry. The rapid growth in premiums will generate more than $805 billion in revenue compared to the $322 billion that was reported in premiums revenue in 2013. At the end of last year, some 3 billion insurance policies were in effect, but this number is expected to inflate quickly as more people begin purchasing various types of insurance policies.
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Insurance premiums may account for 5% of China’s GDP by 2020
The report suggests that the Chinese insurance industry may account for 5% of the country’s gross domestic product by 2020. Native insurers will find the majority of success in the country’s market for the foreseeable future, while foreign insurers will continue to struggle within China. This has been the case for several years, as the government heavily supports domestic companies through various policies and incentives. Foreign insurers have been working to establish a strong foothold in the Chinese market for some time, but most have failed to achieve this goal.
Insurance industry is ready to tackle challenges that emerge in the Chinese market
The insurance industry is facing many challenges throughout China, but many insurers have shown that they are ready and able to overcome new challenges that emerge in the market. One of the most significantly challenges that insurers are facing has to do with health care. A growing number of consumers with medical conditions are purchasing coverage and these people represent a certain degree of financial risk for insurers that have not had to account for costly medical conditions in the past.