China's economic rebound to test foreign insurers

The country is dominated by local insurers.

China may be making strides in post-pandemic economic rebound and in life and non-life insurance expansion, but it also presents challenges to foreign insurers, a GlobalData report revealed.

The report highlighted the efforts of the China Banking and Insurance Regulatory Commission (CBIRC) in protecting insurers from the global economic fallout. Now, the industry is expected to play an important role in assisting businesses and individuals in mitigating COVID-19 risks.

The general insurance market is expected to grow at a CAGR of 4.1% between 2019 and 2023. The top three insurers in the Chinese market are China Life, Ping An Life, and People’s Insurance Company Group, with the remaining top 10 players also local firms.

The highly competitive Asian market will pose a challenge to foreign insurers interested in entering the market, analyst Jazmin Chong said, as various product offerings and heavy instruments are necessary in luring customers.

“The issue is that while China and other countries in the region prove to be favorable markets for potential growth – especially now that insurance markets will be contracting in the majority of Western countries – Asian markets remain dominated by domestic insurers.”

Foreign insurers may also have a hard time winning over consumer trust and in building a reputation, Chong added.