The rapid development of sharing economy in China is bringing big opportunities for the insurance industry because of the solid demand for certain products and services from risk-averse, cost-conscious, consumers.
More than 600 million Chinese people are currently involved in sharing economy. Growth of the sharing economy is forecast at a high 40% annually to reach about 20% of GDP by 2025, reported China Daily citing the China Sharing Economy Development Report 2017. In 2016, transactions in the sharing economy hit CNY3.45 trillion (US$520 billion), up 103% year-on-year, and represented 5% of GDP.
All kinds of products are shared through innovative services, including bicycles, umbrellas, accommodation, books, cars, jewellery, luxury fashion, and office space.
Yuan Yong, a consultant with Aon-COFCO Insurance Brokers, said: "For both users and providers of products and services in sharing economy, there are problems of risk, which can be solved reasonably through insurance mechanisms."
Lu Wenhui, a consultant with Aon-COFCO, said: "By providing convenience to people, the sharing economy separates the ownership and usage of products, which is a situation which makes it hard to define the liabilities of both parties."
Insurers are already providing cover to the sharing economy sector. For example, liability insurance and personal accident cover are provided to users of shared bicycles.