China Digital Byte series
Unleashing a wealth of new opportunities
Insurance in China's digital age
Time for a change
In many respects, China is an insurer's dreamland with a rise of wealth
industry to a $1.3 trillion business as of March 2013.
With the urbanization rate set to reach 51.5% by 2015, China will host 805
million urban residents by 2017. As living standards continue to improve for
both rural and urban residents (annual average increase of 7% of the GDP
per capita), the country is simultaneously undergoing demographic and
generational shifts. 178 million people were aged 60 or
above, representing about 13% of the total population of
China in 2010. This number is
anticipated to double by 2030,
60 age or above
which will turn China into
the world's most aging
society and put an
increasing pressure on
individuals to provide for
their future, while ensuring
the health of the working
To support these socio-economic shifts, the Chinese government is also
planning to build new-generation information infrastructures, including a
state-of-the-art mobile communication network. For a population that
already has the highest rate of internet access over mobile devices globally,
this will only serve to strengthen China as the most mobile – and digitally –
centric populous in the world, with over 420 million mobile internet users by
the end of 2012, according to the China Internet Network Information Center.
These changes are fundamentally disrupting "traditional" insurance
business models. Investors expect insurers to respond and capture the next
100 millions of insured Chinese, but this requires organisations to take a
different approach to the past, and simplicity is the key.
The Chinese market
Meanwhile, China remains a relatively immature private insurance market.
In fact, insurance as a matter of social welfare so far remained a public
preserve. Despite a compound annual growth exceeding 25% since 1996,
Life and Property & Casualty foreign insurance companies only get 4.3%
and 1.2% market share respectively, according to a 2012 PwC survey. This
unsaturated environment bodes well to agency focused distribution channel
that represents over 230 million agents in China.