China leads world insurance business in pivot to the east
Source: Asia Insurance Review | Aug 2019
China will continue to be the driver of the pivot in global insurance markets to the east, according to Swiss Re Institute in its latest World Insurance Report.
According to Swiss Re’s forecasts, the Chinese insurance market is on track to surpass the US as the largest insurance market in the world by the mid-2030s. China consolidated its position as the second largest insurance market globally in 2018, with total premiums written of $575bn in 2018. Currently, the Chinese market is still less than 40% the size of the US market ($1.469tn).
The Chinese insurance market is also smaller than the three largest markets in Europe combined (the UK, Germany, France: $836bn). The forecast is that it will be bigger than the three named markets by 2022.
These gaps only serve to demonstrate the catch-up potential, which Swiss Re expects China will fill very rapidly.
China’s share of the global insurance market went from 0% in 1980 to 11% in 2018, and is forecast to reach 20% in 10 years’ time, almost as high as the share projected for the whole of advanced EMEA.
The report forecasts that the insurance markets in all of Asia-Pacific will count for 42% of the global premiums by 2029.
Further, Swiss Re expects the insurance market in China to grow faster than those in other emerging markets. China already accounts for more than 50% of total emerging market premiums and the share will increase.
The other markets in emerging Asia will also grow as GDP per capita continues to increase rapidly, fuelling insurance demand.
The pivot east is illustrated by the table below:
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