Financial Trends: Personal Insurance Expected to Continue Growth Trend in First Quarter
The personal insurance industry in China has experienced significant developments in 2023, with the growth of insurance premium income surpassing that of property insurance. Data released by the State Administration of Financial Supervision shows that the original insurance premium income of the insurance industry reached 5.12 trillion yuan, a year-on-year increase of 9.136%. Among this, personal insurance premium income was 3.54 trillion yuan, a year-on-year increase of 10.25% on a comparable basis, demonstrating significant growth in the sector.
One of the major factors contributing to the growth of personal insurance sales is the declining long-term deposit interest rates, which have led many households to consider migrating their savings and investments to long-term savings insurance products. With falling interest rates and the turbulence in the capital market, savings products may rise in both volume and price, boosting the demand for personal insurance.
The integration of bancassurance channels and banks is expected to further enhance the competitiveness of insurance products. Banks are expected to use volume-based price premium strategies to increase the sales of bancassurance products, leading to a continued growth trend in the first quarter of 2024 for personal insurance.
In terms of agent channels, industry regulations have been put in place to ensure the sales capabilities and integrity of insurance sales personnel. The Insurance Association of China has introduced a grading framework for insurance agents, dividing them into four levels based on their professional knowledge, sales ability, and conduct status. This efficiency improvement cycle is expected to stabilize the number of agents and increase the per capita income of life insurance agents.
Looking ahead to 2024, listed insurance companies are optimistic about a strong start in life insurance, with expectations for improvement in property and casualty insurance. The demand for savings insurance is expected to remain high, and the shift of customers’ asset allocation from bank deposits to insurance products is projected to benefit leading insurance companies.
In the health insurance sector, the focus is shifting from inclusive medical care to mid-to-high-end direction, with a growing emphasis on major disease protection and long-term medical insurance with guaranteed renewal clauses. Sub-standard insurance is also expected to contribute to the growth of health insurance in the future.
Overall, the personal insurance industry in China is poised for continued growth in the first quarter of 2024, driven by various factors such as declining deposit interest rates, integrations in bancassurance channels, and regulatory measures to enhance the professionalism of insurance sales personnel.