Page 326 - 2023 White Paper on the Business Environment in China
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3 White Paper on the Business Environment in China
compared with 2021 to reach 2.73 trillion RMB. The shaped by more digitally advanced industries. This
bank said in 2022 it had stepped up credit issuance has driven insurers to react through radical digital
to key foreign trade links such as ports, docks transformation programs at two levels, which are
and airports. China EximBank is a State-funded value proposition and service delivery. Ecosystem
and State-owned policy bank supporting China's play helps insurers to find new levers within the
foreign trade, investment, and international value chain and advance their business model.
economic cooperation (Xinhua, China Eximbank). Successful players could upgrade their business
model from pure protection to include prevention
Insurance (for reducing claims frequency), service (for
reducing claims severity and increasing customer
China is currently the world’s second-largest loyalty) – while also increasing lead generation in
insurance market and is expected to overtake the the moment of need. With this, insurers are moving
US for the top spot in the next decade. Being the from an insurance-centric perspective to a more
world’s most populous country, insurers in Asian customer-centric perspective, bringing together
markets and worldwide can learn from China’s services from across industries. In the meanwhile,
rapid growth in recent decades. China is a massive the Chinese market continues to embrace the
single market and various internal and external advanced know-how across sub-markets, such as
factors have shaped how the insurance industry life, non-life, intermediaries, pension, and asset
has evolved to its current iteration. Some of the management. There are also major business
biggest trends include fundamental changes to the opportunities in social protection and common
business model, ecosystem development as well as prosperity causes as insurers are encouraged
rapid digitalization. The most obvious and largest to take a more active role in promoting them.
trend for insurance in China is the significant These include areas such as health, retirement,
transformation in the life and the property and agriculture, credit and guarantee, and catastrophe
casualty (P&C) industries, with the agency channel insurance. Products are also designed to cater to
exhibiting the largest change. Life insurers have been socioeconomically disadvantaged groups, such as
downplaying scale while shifting their focus to value senior citizens, rural residents and self-employed
creation. Essentially, there has been a decoupling or flexible employment contracts (Olano).
from asset-driven and ‘mass-in-mass-out’ models.
And in response to calls for a more protection- Total assets of China's insurance sector
focused orientation, life insurers in China have amounted to 26.6 trillion RMB (about US$3.88
been undergoing value-driven transformations trillion) at the end of June 2022. This figure was
along multiple dimensions, including customer 1.8 trillion RMB more than that at the beginning
segmentation, channel, product, and operations. of the year. The sector largely retained stable
For P&C insurers, there has been increased focus performance, had a stronger ability to fend off
on combined operating ratio optimization, with risks, and more effectively served the real economy.
core inflationary hikes lurking around the corner, Combined insurance premium incomes went up
pushing up claim expenses. Customer acquisition 5.1% year-on-year in the first half of 2022 to 2.8
also has become a core issue, with increased costs trillion RMB, and expenditure on compensation
due to channel dominance, putting pressure on and payment reached 776.8 billion RMB, up 3.1%
P&C players to improve underwriting and operation (Xinhua, China’s Insurance Sector).
efficiency. Another major trend is a push for a high-
quality market and ecosystem development. This China's insurance sector is expected to see
includes moving towards a more competitive and stable growth though 2024 as the country's
fair market, which will remain a key theme for inflation risks are well under control and the
the insurance sector. Rapid digitalization has also overall economic fundamentals remain solid.
driven down the cost for tech-enabled products 2022 marks the transformation of the country's
and services further with an increasing focus on insurance sector after slower growth in both
automation. Insurers are now dealing with new life and non-life insurance in 2021. Given the
customer expectations, which are being constantly potential of elderly care services and the industry's
commitment to innovation and digitization, China's
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compared with 2021 to reach 2.73 trillion RMB. The shaped by more digitally advanced industries. This
bank said in 2022 it had stepped up credit issuance has driven insurers to react through radical digital
to key foreign trade links such as ports, docks transformation programs at two levels, which are
and airports. China EximBank is a State-funded value proposition and service delivery. Ecosystem
and State-owned policy bank supporting China's play helps insurers to find new levers within the
foreign trade, investment, and international value chain and advance their business model.
economic cooperation (Xinhua, China Eximbank). Successful players could upgrade their business
model from pure protection to include prevention
Insurance (for reducing claims frequency), service (for
reducing claims severity and increasing customer
China is currently the world’s second-largest loyalty) – while also increasing lead generation in
insurance market and is expected to overtake the the moment of need. With this, insurers are moving
US for the top spot in the next decade. Being the from an insurance-centric perspective to a more
world’s most populous country, insurers in Asian customer-centric perspective, bringing together
markets and worldwide can learn from China’s services from across industries. In the meanwhile,
rapid growth in recent decades. China is a massive the Chinese market continues to embrace the
single market and various internal and external advanced know-how across sub-markets, such as
factors have shaped how the insurance industry life, non-life, intermediaries, pension, and asset
has evolved to its current iteration. Some of the management. There are also major business
biggest trends include fundamental changes to the opportunities in social protection and common
business model, ecosystem development as well as prosperity causes as insurers are encouraged
rapid digitalization. The most obvious and largest to take a more active role in promoting them.
trend for insurance in China is the significant These include areas such as health, retirement,
transformation in the life and the property and agriculture, credit and guarantee, and catastrophe
casualty (P&C) industries, with the agency channel insurance. Products are also designed to cater to
exhibiting the largest change. Life insurers have been socioeconomically disadvantaged groups, such as
downplaying scale while shifting their focus to value senior citizens, rural residents and self-employed
creation. Essentially, there has been a decoupling or flexible employment contracts (Olano).
from asset-driven and ‘mass-in-mass-out’ models.
And in response to calls for a more protection- Total assets of China's insurance sector
focused orientation, life insurers in China have amounted to 26.6 trillion RMB (about US$3.88
been undergoing value-driven transformations trillion) at the end of June 2022. This figure was
along multiple dimensions, including customer 1.8 trillion RMB more than that at the beginning
segmentation, channel, product, and operations. of the year. The sector largely retained stable
For P&C insurers, there has been increased focus performance, had a stronger ability to fend off
on combined operating ratio optimization, with risks, and more effectively served the real economy.
core inflationary hikes lurking around the corner, Combined insurance premium incomes went up
pushing up claim expenses. Customer acquisition 5.1% year-on-year in the first half of 2022 to 2.8
also has become a core issue, with increased costs trillion RMB, and expenditure on compensation
due to channel dominance, putting pressure on and payment reached 776.8 billion RMB, up 3.1%
P&C players to improve underwriting and operation (Xinhua, China’s Insurance Sector).
efficiency. Another major trend is a push for a high-
quality market and ecosystem development. This China's insurance sector is expected to see
includes moving towards a more competitive and stable growth though 2024 as the country's
fair market, which will remain a key theme for inflation risks are well under control and the
the insurance sector. Rapid digitalization has also overall economic fundamentals remain solid.
driven down the cost for tech-enabled products 2022 marks the transformation of the country's
and services further with an increasing focus on insurance sector after slower growth in both
automation. Insurers are now dealing with new life and non-life insurance in 2021. Given the
customer expectations, which are being constantly potential of elderly care services and the industry's
commitment to innovation and digitization, China's
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