China's continuous economic recovery drives significant revival of insurance industry

China's continuous economic recovery has driven a significant revival of the insurance industry, ThePaper reported on Wednesday.

China's insurance industry achieved a total primary insurance premium income of 5.12 trillion yuan ($706.61 billion), representing a year-on-year growth of 9.14 percent in 2023, according to data from the National Financial Regulatory Administration.

In terms of insurance budgets, it is anticipated that insurance consumption will further recover, with over 60 percent of consumers budgeting premiums of more than 8,000 yuan, according to the 2023 China Online Insurance Customer Insight Report.

Over 40 percent of high-income individuals are expected to allocate over 20,000 yuan to household premiums in the coming year, according to the report jointly released on April 23.

China's insurance industry will continue to benefit from economic development and the growing risk awareness among the population, becoming a crucial force in supporting economic stability and social security, said Wei Chenyang, director of the China Insurance and Pension Research Center at Tsinghua National Institute of Financial Research.

While traditional offline channels remain the preferred method for purchasing insurance, there has been a general increase in the rate of online insurance purchases across all age groups in 2023 compared to 2022, accompanied by a decrease in offline purchase rates, the report said.

Consumers with higher incomes, higher education background, and residing in higher-tier cities tend to prefer purchasing insurance online. It is noteworthy that the preference for online channels among the elderly has significantly increased, with the online purchase rate among respondents aged 51 to 60 rising from 63 percent in 2022 to 72 percent in 2023, the report said.

The top three reasons cited by consumers for purchasing insurance online are "flexible payment" (52 percent), "convenient application process" (49 percent), and "easy self-inquiry service for product selection" (46 percent).

Higher-income and higher-tier city residents prioritize convenience, autonomy, and reduced hassle in the application process, while those with lower incomes and residing in lower-tier cities value recommendations from relatives and friends.

In the future, there will be significant growth in various online channels, with 82 percent of respondents planning to purchase insurance online, surpassing offline channels (76 percent).

In terms of insurance types, consumers' awareness of health risk protection ranks highest, with critical illness insurance being the most widely held product in 2023, held by 60 percent of respondents, primarily among the "high-income, high-education, high-tier city" demographic, according to the report.

The intensifying aging population puts pressure on the social security system, with consumers' retirement anxieties driving interest in commercial endowment insurance and long-term care insurance. Among the planned insurance purchases for the future, commercial endowment insurance ranks second.

Currently, the main buyers of commercial endowment insurance are still middle-aged individuals with high incomes, but in the next 1-2 years, the proportion of young people aged 20-30 planning to purchase commercial endowment insurance will be the highest, indicating a trend of younger individuals becoming concerned about retirement, the report said.

Impacted by declining interest rates, the certainty of long-term interest locking in insurance products stands out as a cornerstone of consumer wealth management, making savings-type insurance products highly favored.

Among the new insurance products in 2023, savings-type insurance ranked sixth; in planned purchases, savings-type insurance rose to fourth place, indicating significant growth potential.

Currently, the "high-income, high-education, high-tier city" demographic is the main buyer of savings-type insurance, but it will expand to younger demographics in moderately prosperous income groups and lower-tier cities in the future.

The stability of returns is the most important factor for consumers when purchasing savings-type insurance.