The report, jointly issued by the Risk Management Research Team at ZUEL led by Professor Hu Hongbing and Ytact (Ningbo) Digital Technology Co., Ltd, a promising InsureTech start-up, aims to look at how China’s insurance industry can assume its responsibility to better serve the real economy and promote high-quality economic and social development.
Based on the industry statistics of the past decade, this annual report presents a comprehensive analysis of the market size and structure, industry trends, and new policies, to support a better understanding of the overall performance and the prospects of the insurance industry in China.
The theme of this report is “From High-Speed Growth to High-Quality Development”, and the key words are “negative growth”, “slower growth rate” and “high-quality development”. The report takes the form of 100 slides and an 80-page white paper with 15 chapters, involving the scale and growth rate of total premium income, insurance density (i.e., premium per capita) and penetration (i.e., percentage of premium in gross domestic product), total benefit payments, the scale and structure of insurance assets, and insurance technology.
According to the report, the total premium income has seen a growth overall for the last 15 years with the exception of decline for twice in annual data. In 2021, due to the impacts of the regular epidemic prevention and control, the comprehensive reform of auto insurance and other factors, both life and auto insurance showed negative growth, and the total premium income also dropped slightly to 4.49 trillion yuan, down by 35.7 billion yuan compared with 2020.
Since 2012, the growth rate of the total premium income has experienced a high volatility with a rise at first and a fall later. In 2021, the total premium income declined at a rate of -0.8%, witnessing the first negative growth in ten years and the second in fifteen years. Nonetheless, China was the second-largest insurance market in the world by premium volume again in 2021, retaining this position for the fourth consecutive year after surpassing Japan in 2017.
The report points out that China’s insurance industry has enormous room to grow, which is expected to shift from rapid growth to high-quality development by meeting the demands of national economic and social progress. Favorable policies, as the strong support for the future of China’s insurance industry, can provide an enabling environment for the insurance sector to achieve high-quality development through supply-side reform and transformation, greater alignment with national strategies and application of insurance technology. Therefore, the insurance industry needs to attach more importance to rural revitalization, aging population (pension and commercial endowment insurance), modernization of national governance system, carbon peaking and carbon neutrality goals, catastrophe and liability insurance, green insurance, etc.
“Our report is timely, targeted and unprofitable, which distinguishes it from others.” Prof. Hu said, “It is released in the first quarter of the year to the public for free, while other reports on the insurance industry are mostly released in the second half of the year. Moreover, the report is released simultaneously in the form of PPT and white paper so as to reach a larger audience.
Prof. Zou Jinwen, Vice President of ZUEL, said that China’s insurance industry has been witnessing a gradual transformation from scale expansion to high-quality development over the past seven decades. At this critical point, it is necessary to seize all opportunities to accelerate the development of modern insurance industry, which offers better support for the future of the state, society, institutions, families and individuals with generally controllable risks.
This year marks the second time for the School of Finance at ZUEL releasing the China Insurance Development Report. The preparation of this year’s report took 2-3 months from the second half of 2021 to the end of that year when its writing officially began. The data in this report mainly came from authoritative sources like the National Bureau of Statistics, the China Banking and Insurance Regulatory Commission, and the Yearbook of China’s Insurance, and some data were collated from the Internet.