China Digital Byte series

Insurance in China’s digital age

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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 double individuals to provide for their future, while ensuring 2010 2030 the health of the working population. 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.

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