China Motor Insurance Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

China Motor Insurance Market- Segmented by Motor Insurance Types and Distribution Channels - Growth, Trends, and Forecast (2019 - 2024)

Market Snapshot

CAGR
Study Period: 2016 - 2026
Base Year: 2020
CAGR:

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Market Overview

China’s insurance industry has seen a robust pace of growth for a decade. Total premium income rose 27.5% in 2016 to reach RMB 3.1 trillion (USD 490 billion), the strongest growth the industry has enjoyed since 2008. Total insurance industry assets, as of the end of 2018, stood at RMB 18.33 trillion (USD 2.71 trillion), a 9.45% increase from the beginning of the year. Total Non-life net premiums accounted for USD 223.88 billion at the end of 2017.  Statistics for 2018 shows that overall insurance premium income rose 3.92% from a year earlier to RMB 3.8 trillion (USD 562.52 billion). As the industry adjusts, premium income growth will likely accelerate in the coming years.

In 2019, the share of the auto insurance business in China has slipped to 57.68% in the first quarter, according to data from the CBIRC. This contrasts with a few years ago when motor dominated non-life business with a market share of over 70%.

China’s insurance industry is still growing and has a potential room to grow. Foreign insurers’ market share is currently modest. However, newly introduced regulations, along with economic and social growth drivers that are conducive to their expansion.

Scope of the Report

The China Motor Insurance is segmented by the Type of Motor Insurance like Third-party Liability and Commercial License. Furthermore, it is segmented into by the channel of distributions like Point of sale agents, Bank Accounts, Brokers and digital channels. 

BY TYPE OF MOTOR INSURANCE
Third Party Liability
Commercial Insurance
BY CHANNEL OF DISTRIBUTION
Point of Sale Agents
Brokers
Banks Accounts
Digital Channels

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Key Market Trends

Non-Life Insurance Market Scenario In The Country

The Chinese Insurance industry’s strong growth has been supported by the opening of the Chinese market to international insurers after the country’s accession to the World Trade Organization in 2001, and also by supportive government policy. According to Industry experts, China became the world’s second largest non-life insurance market in 2017, with a premium income of more than USD 200 billion. For a decade the Chinese non-life insurance market is one of the prominent markets globally. It offers huge opportunities and growth potential to insurance companies across the globe.

Liberalization of motor insurance pricing to undermine the insurers' ability to boost their underwriting margins. However, the expansion in non-motor policies is likely to offset the slower growth from motor insurance. Steady economic expansion and regulatory initiatives will boost demand for non-motor insurance such as accident and health policies. Motor premium growth is likely to slow as insurers cut their rates after the government's further liberalization of commercial motor insurance in June 2017 to increase competition. Motor insurance volumes could be further affected if the withdrawal of tax benefits for the purchase of small-engine vehicles in 2018 moderates new auto sales.

  • Urbanization is potentially another key factor in the demand for non-life insurance. A more urbanized population often leads to higher motor vehicle ownership with a corresponding impact on Motor insurance.
  • The non-life personal business was boosted by a revision of the Insurance Law in 2002 which granted non-life insurers with due certification permission to offer short-term health and accident insurance. Growth has accelerated further since 2016 with the development of online insurance and the introduction of innovative short-term health covers.
  • China’s non-life insurance market is dominated by the three largest players — the PICC Property & Casualty Company, Ping a Property & Casualty Insurance Company of China, and China Pacific Property Insurance. The combined market share of these three companies in the motor insurance sector stood at 66.9 percent as of the end of the first quarter. At the end of 2017, China was home to 50 foreign insurers, 28 life and 22 in non-life business respectively. Foreign companies accounted for just 6% of the life market and 2% of non-life within a short period of time.
  • There are 85 non-life insurers operating in China, but the five largest firms corner the lion’s share of the market, with a combined 70%. These insurers have experienced their combined ratio improved slightly to 97.8% in 2017 from a weighted average of 98.3% in 2016. This means that the current market conditions favor these large insurers.
Top Companies

Impact of Reformed Motor Insurance Regulations on the Industry

In the last 10 years, the motor sector has been the main driver of the strong growth in non-life personal insurance. Nevertheless, the sector is still in its infancy and high channel commissions and operating expenses have dented profitability. In 2014, the former China Insurance Regulatory Commission (CIRC) issued new guidelines on motor tariffs to improve the provision of covers and increase product differentiation among competitors. Successive drives to liberalize motor tariffs in 2015, 2017 and lastly in March 2018 have intensified competition in the motor. Small- and medium-sized insurers with high combined ratios, in particular, are feeling the heat.

Throughout 2018, the CIRC/CBIRC and other authorities continued to implement the ongoing reforms that they had initiated in 2017. These reforms are intended to address excessive risk and reorient China’s insurance industry towards long-term sustainable growth. The liberalization of commercial motor insurance premium rates will limit insurers' ability to improve their margins, leading to slower surplus growth.

The sector reported a single-digit growth of 9 percent in the first nine months of 2016, compared with 11.4 percent during the same period a year earlier. Motor insurance, the major business class in non-life insurance, saw direct written premiums rise by 9.28 percent year-on-year in the third quarter of 2016, down from 12 percent growth in 2015. The slowdown was partly because the first trial deregulation of commercial motor insurance pricing was rolled out by the China Insurance Regulatory Commission (CIRC), initially in six Chinese regions starting in June 2015, then in 12 more provinces and cities from January 2016. Deregulation has the effect of producing higher acquisition costs as market rivalry increases. This, coupled with an influx of new players, could further constrain major insurers’ capability to improve their margin.

Car Sales China

Competitive Landscape

The China Motor Insurance Market is highly competitive, with the presence of major international players. The China Motor Insurance Market presents opportunities for growth during the forecast period, which is expected to further drive market competition. With a few players holding a significant share, the China Motor Insurance Marketh as an observable level of consolidation. But the recent reformed govt policies welcoming the foreign players into the country with 100% ownership might increase the competitiveness among the major players as already many global giant insurers are in the race to capture potential market share in the country.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Market

    2. 1.2 Market Definition

    3. 1.3 Executive Summary

  2. 2. RESEARCH METHODOLOGY

    1. 2.1 Study Deliverables

    2. 2.2 Study Assumptions

    3. 2.3 Analysis Methodology

    4. 2.4 Research Phases

  3. 3. MARKET INSIGHTS

    1. 3.1 China Current Economic and Insurance Industry Scenario

    2. 3.2 Impact of Government Regulations and Initiatives on the Insurance Industry

    3. 3.3 Impact of Global Insurance Market on China Industry

    4. 3.4 Key Trends in China Insurance Industry and InsurTech Market

    5. 3.5 Review and Commentary on Chaina's Non-Life and Motor Insurance

    6. 3.6 Impact of China's Deregulation Policies on the Motor Insurance

    7. 3.7 Impact of Foreign/International Players on the China's Insurance Market

  4. 4. MARKET DYNAMICS

    1. 4.1 Drivers

    2. 4.2 Restraints

    3. 4.3 Opportunities

    4. 4.4 Porter's Five Forces Analysis

    5. 4.5 Industry Structure Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 BY TYPE OF MOTOR INSURANCE

      1. 5.1.1 Third Party Liability

      2. 5.1.2 Commercial Insurance

    2. 5.2 BY CHANNEL OF DISTRIBUTION

      1. 5.2.1 Point of Sale Agents

      2. 5.2.2 Brokers

      3. 5.2.3 Banks Accounts

      4. 5.2.4 Digital Channels

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Concentration Overview

    2. 6.2 Strategies Adopted by Major Players

  7. 7. COMPANY PROFILES

    1. 7.1 China Life Property & Casualty Insurance Co. Ltd.

    2. 7.2 Sunshine Property and Casualty Insurance Co. Ltd.

    3. 7.3 Yingda Taihe Property Insurance Co. Ltd.

    4. 7.4 Sinosafe General Insurance Co. Ltd.

    5. 7.5 AXA Tianping Property & Casualty Insurance Co. Ltd.

    6. 7.6 Groupma AVIC Property Insurance

    7. 7.7 Allianz China General Insurance

    8. 7.8 Zurich General Insurance (Chine

    9. 7.9 PICC Property and Casualty

    10. 7.10 Ping An Property and Casualty Insurance Co. of China*

  8. 8. INVESTMENT ANALYSIS

  9. 9. MAJOR MERGERS AND ACQUISITIONS IN THE CHINA INSURANCE INDUSTRY

  10. 10. FUTURE OF GENERAL AND MOTOR INSURANCE MARKET IN CHINA

  11. 11. APPENDIX

    1. 11.1 China General Insurance Key Statistics

    2. 11.2 Number of Active Motor Insurance Policies 2015-2018

    3. 11.3 Gross & Net Motor Insurance Written Premiums 2015-2018

    4. 11.4 Gross Motor Insurance Claims Incurred during 2015-2018

  12. 12. DISCLAIMER

**Subject to Availability

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Frequently Asked Questions

The China Motor Insurance Market market is studied from 2016 - 2026.

The China Motor Insurance Market is valued at 4.5% in 2016.

China Life Property & Casualty Insurance Co. Ltd., Sunshine Property and Casualty Insurance Co. Ltd., Yingda Taihe Property Insurance Co. Ltd., AXA Tianping Property & Casualty Insurance Co. Ltd., Zurich General Insurance (Chine are the major companies operating in China Motor Insurance Market.

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