China’s general insurance sector to surge 7.4% in CAGR by 2028

The sector’s CAGR is seen to climb 6.9% this year.

The Chinese general insurance industry will experience a compound annual growth rate (CAGR) of 7.4% from $237.2b in 2023 to $361.0b in 2028 in terms of gross written premiums (GWP), projected by GlobalData.

“After experiencing a slowdown in 2020 and 2021 due to COVID-19, China’s general insurance industry revived in 2022 and grew by 8.7%, which will continue in 2023. With the government’s push to revive the major sectors of the economy, the general insurance industry looks poised for steady growth over the next five years,” said Swetansha Chauhan, Insurance Analyst at GlobalData in a media release.

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In 2023, the industry is expected to grow by 7.7%, followed by a 6.9% growth in 2024, driven by factors such as increased vehicle sales, infrastructure investments, favourable regulatory reforms, and post-pandemic demand for health insurance.

Motor insurance dominates the market, constituting 54.4% of the general insurance GWP in 2023. 

However, its share has decreased from 71.0% in 2017 as insurers diversify their portfolios and reduce reliance on motor insurance.

The motor insurance segment is projected to grow by 6.1% in 2023, fueled by a rise in vehicle sales and government initiatives to stimulate the automobile sector. 

“Higher EV sales have also supported the growth of motor insurance in 2023. Additionally, higher insurance premiums for electric and hybrid vehicles than those for internal combustion engine vehicles, which will support motor insurance growth,” said Swetansha.

Favourable regulatory reforms, including adjustments in premium pricing coefficients, will further bolster growth, with a projected CAGR of 4.5% from 2023 to 2028.

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Property insurance, comprising 15.1% of GWP in 2023, is supported by investments in infrastructure and the agriculture sector. It is expected to grow at a CAGR of 12.2% during 2023-28.

Personal Accident and Health (PA&H) insurance, accounting for 14% of GWP in 2023, is driven by increased health insurance demand post-pandemic and rising medical costs, with a growth forecast of 3.7% in 2023.

Other segments like Liability, Financial lines, Marine, Aviation, and Transit (MAT), and Miscellaneous insurance contribute to the remaining 16.5% of the GWP in 2023.

“Favourable regulatory developments and government initiatives will support the Chinese general insurance industry’s growth. However, global economic and geopolitical instabilities will remain a major challenge for Chinese general insurers over the next five years.” Swetansha added.