China’s awakening sends shockwaves around the world

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In less than 20 years, insurance premiums have risen by 2800%, reaching 541.45 billion USD in 2017. During the same period, China's GDP went up by 1000%, from 1 211.3 billion USD in 2000 to 12 237.7 billion USD in 2017. At the end of last year, 169 insurance companies, 50 of which foreign companies, were active on the market, whereas twenty years earlier, only PICC (People Insurance Company of China) set up in 1949, was allowed to practice.

Remarkably, the spectacular growth of the market is accounted for by local insurers who underwrote 94% of the premiums at the end of 2017. In China, the contribution of foreign insurers remains insignificant.

First Asian insurance market at the beginning of the 20th century with some flagships of insurance like the Canton Insurance Company, founded in 1805, and the American Asiatic Underwriters (AAU), the ancestor of AIG, which started its activities in Shanghai in 1919, China has progressively stalled from the international scene.

It was not until the early 1990s that insurance rose from the ashes with the establishment of the first joint stock companies Ping An and China Pacific.

Nowadays, it is China that is driving global insurance. Out of the 156 billion USD of additional life and non-life premiums written in 2017, 75 billion USD, that is 48%, come from China. In life insurance, China's contribution is even more remarkable, with 80% of the 2017 global premiums written in the middle empire.

The market potential is considerable as China is far from having met the needs of a population of 1.4 billion people living in consumer frenzy. With a record savings rate of around 50% of GDP and a low penetration rate compared to advanced economies, the Chinese insurance market is not about to slow down. According to forecasts, China is poised to overtake the United States in less than ten years.

Atlas Magazine N°154, October 2018 [1]