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China’s general insurance market will reach $304.4 billion in 2026

China’s non-life insurance market is expected to grow at a compound annual growth rate (CAGR) of 7.2%, from 1,367.7 billion yuan ($212.1 billion) in 2021 to 1,943.1 billion yuan ($304.4 billion) in 2026 in terms of direct written premiums. (DWP), forecasting, GlobalData, a leading data and analytics company.

According to GlobalData, China’s non-life insurance industry is expected to recover in 2022 and continue its growth trend over the next five years after registering a weak growth of 0.7% in 2021 due to a decline in car insurance due to supply chain disruptions and severe shutdowns in major manufacturing centers in Shanghai and Changchun led to lower car sales.

Shabbir Ansari, Principal Insurance Analyst at GlobalData, said that “The weak growth in 2021 was mainly attributed to strict lockdowns due to China’s zero COVID policy. Declining auto sales also affected general insurance growth, as auto insurance accounts for more than 50% of general insurance premiums.”

Motor insurance was the largest line in China’s general insurance market, accounting for 56.8% market share of DWP in 2021. The segment is expected to recover from 2023, as car sales are expected to improve due to the proposed extension of the subsidy for electric cars. until 2023. Electric vehicles accounted for nearly 20% of the total number of vehicles sold in China in 2021.

The GlobalData analyst added that “The expected increase in sales of electric and hybrid vehicles, whose premium is 20% higher than that of internal combustion engine vehicles, will help the motor insurance segment recover from 2023 to grow at a CAGR of 2.4% from 2021-26.”

Personal accident and health (PA&H) insurance was the second largest non-life insurance line in China, accounting for a 14.7% share of DWP in 2021. PA&H insurance is expected to continue its double-digit growth over the forecast period, driven by increased awareness of protection and financial planning due to recurring waves of COVID-19.

Shabbir Ansari pointed that out “Rising medical costs will drive premiums, which will also support the growth of PA&H insurance. As a result, PA&H insurance is expected to grow at a CAGR of 15.6% during the period 2021-26.”

Property insurance was the third largest line, accounting for a 12.7% share of general insurance premiums in China in 2021. Property insurance is expected to grow at a CAGR of 12.4% during the period 2021-26 driven by Chinese government plans to invest more . more than $1 trillion in infrastructure projects, including high-speed rail networks, renewable energy projects and water tunnels expected to be completed by 2030, will boost property insurance.

Liability, financial lines, marine, aviation and transit (MAT) and miscellaneous insurance accounted for the remaining share of 15.8% in 2021. Shabbir Ansari estimated that “The expected recovery in car sales, rising health awareness and increased investment in infrastructure projects will support growth in non-life insurance in China. However, rising inflation will increase claims costs, which will affect insurers’ margins.

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