The Chinese insurance industry remains on track to record strong growth between 2019 and 2023 as the sector begins to recover from the losses driven by the COVID-19 outbreak, reports GlobalData.
Analysis by GlobalData finds that regulatory changes and the use of technology are key to the ability of China’s insurance industry to recover from the impacts of the coronavirus outbreak.
The virus continues to spread in many parts of the world, but it’s hoped that China, where the first cases of the novel COVID-19 were reported, is over the worst and on the path to recovery.
GlobalData states that while its forecast growth rate for the country’s insurance sector between 2019 and 2023 has fallen on COVID-19, the market is still set for robust growth during this period. According to analysis, the Chinese insurance industry will experience a revised growth rate with a compound annual growth rate (CAGR) of 6.1% during the period, which is down from the previous forecast of 10.4%.
Ben Carey-Evans, Analyst of Insurance at data and analytics company, GlobalData, commented: “These are extraordinarily difficult times for all businesses, and Ping An losing so many customers is no surprise. It is impressive that it has managed to extend its reach way beyond its customer base via its digital ‘Good Doctor’ app. It is already the leading life insurer in China, and it has now direct access to 1.1bn people through this app.”
Life insurer Ping An, alongside efforts made by the Banking and Insurance Regulatory Commission (BCIRC), are two forces assisting with the recovery of the Chinese marketplace, says GlobalData.
Despite losing 9% of customers following the outbreak, the insurer has reported a tenfold increase in registrations for its online health consultation service, which provides it with access to more than 1 billion people.
The BCIRC is also playing a role and has fast-tracked approval for new low-cost insurance solutions, which offer premiums between 15% – 30% lower than standard critical illness covers. Ultimately, GlobalData feels that this will expand the reach of insurance as more affordable solutions come to market.
“The insurance industry around the world is likely to see significant changes following this pandemic. Insurers will not be able to reset to how it was before when it eventually blows over. Early examples from China suggest more affordable policies to increase the reach of insurance and access to digital services like virtual GPs will be key to bringing consumers back into insurance,” said Carey-Evans.