Market Trends of China Car Insurance Industry
Rising Road Traffic Accidents
Road traffic accidents in China have observed a continuous increase over the years, with Guangdong, Hubei, Guangxi, and Jiangsu existing among the regions in China having the largest number of road traffic fatalities. This is resulting in an increasing number of car owners protecting themself against these risks by purchasing car insurance products. With rising road traffic accidents and existing market conditions, People's Property Insurance, Ping An Property Insurance, and Pacific Property Insurance have emerged as car insurance companies in China, with a market share of more than 60%. Bad roads, Unskilled drivers, overspeeding, and drunken driving are among some of the factors affecting the frequency of road traffic accidents in the country with people saving themself from these uncertain risks by paying insurance premiums in their car insurance policy. Car insurance products offered in China cover cars rather than drivers with other insurance products, including drivers and third-party liability insurance.
Rising Digital Innovation in Car Insurance
Car insurance is among the most popular types of insurance coverage in China. Rising digital insurance with an increasing number of insurtech firms in the insurance sector is increasing the online premium income of car insurance providers in the country. With changing business models from the traditional offline sales channel between insurance companies and buyers, Self-operating platforms of mobile apps, company platforms, and third-party platforms centered around online sales and promotions have emerged, reducing the cost and improving the efficiency of car insurance products. Telematics or usage-based car insurance is emerging as an innovation in the car insurance market, which uses GPS and smartphone-based data to track the driving habits of the car owner based on which user-specific policies and premiums are generated, minimizing the asymmetric information between the insurance provider and insured. The Telematics insurance market in China exists with revenue of around USD 100 million, and the contribution of telematics car insurance to it is expected to increase over the coming period.
