Swiss Re Group, the world’s second-largest reinsurer, has identified China to become the world’s largest insurance market in the next two decades, surpassing the United States insurance market.
According to the report, the said advancement is expected to happen in the mid-2030s, following China’s rapidly ageing population.
“The outlook is promising,” Swiss Re group chief economist Jérôme Jean Haegeli noted. “While global economic growth is slowing, we expect insurance demand to hold up over the next two years, and China will be the main contributor to premium volume gains in both the life and non-life sectors.”
China is expected to hit 20% from its current 11% in its share of global premiums by 2029. By 2032, the East Asian country’s insurance premiums are anticipated to reach US$2.36 trillion, surpassing the US market’s US$1.47 trillion worth.
Swiss Re’s research also sees China ageing up to four times the rate of Europe’s over the last 100 years. This is expected to equate to more sales of annuity products and health insurance in the country.
In 2018, China became the second largest insurance market in the world, having a total premium of 575 billion U.S. dollars. However, currently, the East Asian giant is still falling 40 per cent short to the size of the U.S. market.
China’s ageing population problem, which is mainly wrought by the one-child policy enacted in 1979, leads to an alarming decrease in the country’s birth and marriage rates. However, as mainland China produces more opportunities and greater incomes, health-related insurance is expected to grow tremendously.
“As the current China market lacks holistic medical systems for the general public, many people would turn to insurers to protect themselves from potential dangers such as food safety or causalities,” said Gordon Tsui, managing director of Hantec Group Hong Kong.