PricewaterhouseCoopers: Foreign insurance companies in China expect to grow by up to 50% per annum
10/9/2008 14:17
The total number of foreign insurance companies in China may expand up to 70 and achieve 10% market share by 2011.
Hong Kong, 2 September 2008 – Foreign insurance companies operating in China believe that they will continue to increase their market share, with most expecting they will achieve a 10% market share by 2011. Five of all the responded companies optimistically predict that the market share will rise above 10%, according to the second PricewaterhouseCoopers’ (PwC) survey entitled “Foreign insurance companies in China”.
Although the foreign insurers displayed increased concern in 2008 with regard to the domestic and global economies, the volatile Chinese stock market and the appreciation of the domestic currency, survey respondents believe that increasing affluence in China will stimulate the need for protection products and insurance providers recognise that the current market is under-served.
“The Chinese consumer, particularly in the growing middle class, will become more aware of the need for insurance on both the savings and protection sides, ” said Tom Ling, PricewaterhouseCoopers Assurance Partner. “Our survey results indicated that the foreign insurers continue to emphasise sales growth. Most life insurance companies project annual premium growth in the 30% to 50% range while the foreign property and casualty companies recorded more modest growth targets of 20% to 40% for 2008 and over the next three years.”
The outlook for the insurance industry in China is prosperous and is reflected in the strong commitment of the parent companies of both life insurers and the property and casualty insurers to the Chinese market. Twenty-seven respondents assigned a score of 8 or above, on a scale of 1 to 10, where 10 represents the highest level of commitment to the Chinese market.
Talent is recognised as one of the keys to success in the insurance industry. Recruitment is one of the most pressing challenges faced by the foreign insurers as they plan future growth and expansion in China. “A significant number of participants highlighted the human resources issue. They find it difficult to hire across the board, particularly at the senior executive, actuarial personnel, branch and middle management levels, “said Peter Whalley, PricewaterhouseCoopers Assurance Partner. “Staff turnover also compounds the issue. In 2008, 68% of the participants indicated turnover rates of 10% to 24% and the issue is expected to persist until 2011.”
In regards to market strategy, most of the foreign life insurers attached greatest importance to the life insurance market over the next three years and placed it ahead of other types of insurance such as health insurance, personal accident and group insurance. In the property and casualty sector, foreign players believe they have been successful in cargo and transportation insurance and personal accident insurance and attribute major importance to both these markets.
Overall, the foreign insurers’ five years strategies will continue to place a major emphasis on building alliances with Chinese partners. “Many participants are thinking of alliances with banks and other financial institutions. A few of them also consider M&A. “added Mr. Ling.
Hong Kong, 2 September 2008 – Foreign insurance companies operating in China believe that they will continue to increase their market share, with most expecting they will achieve a 10% market share by 2011. Five of all the responded companies optimistically predict that the market share will rise above 10%, according to the second PricewaterhouseCoopers’ (PwC) survey entitled “Foreign insurance companies in China”.
Although the foreign insurers displayed increased concern in 2008 with regard to the domestic and global economies, the volatile Chinese stock market and the appreciation of the domestic currency, survey respondents believe that increasing affluence in China will stimulate the need for protection products and insurance providers recognise that the current market is under-served.
“The Chinese consumer, particularly in the growing middle class, will become more aware of the need for insurance on both the savings and protection sides, ” said Tom Ling, PricewaterhouseCoopers Assurance Partner. “Our survey results indicated that the foreign insurers continue to emphasise sales growth. Most life insurance companies project annual premium growth in the 30% to 50% range while the foreign property and casualty companies recorded more modest growth targets of 20% to 40% for 2008 and over the next three years.”
The outlook for the insurance industry in China is prosperous and is reflected in the strong commitment of the parent companies of both life insurers and the property and casualty insurers to the Chinese market. Twenty-seven respondents assigned a score of 8 or above, on a scale of 1 to 10, where 10 represents the highest level of commitment to the Chinese market.
Talent is recognised as one of the keys to success in the insurance industry. Recruitment is one of the most pressing challenges faced by the foreign insurers as they plan future growth and expansion in China. “A significant number of participants highlighted the human resources issue. They find it difficult to hire across the board, particularly at the senior executive, actuarial personnel, branch and middle management levels, “said Peter Whalley, PricewaterhouseCoopers Assurance Partner. “Staff turnover also compounds the issue. In 2008, 68% of the participants indicated turnover rates of 10% to 24% and the issue is expected to persist until 2011.”
In regards to market strategy, most of the foreign life insurers attached greatest importance to the life insurance market over the next three years and placed it ahead of other types of insurance such as health insurance, personal accident and group insurance. In the property and casualty sector, foreign players believe they have been successful in cargo and transportation insurance and personal accident insurance and attribute major importance to both these markets.
Overall, the foreign insurers’ five years strategies will continue to place a major emphasis on building alliances with Chinese partners. “Many participants are thinking of alliances with banks and other financial institutions. A few of them also consider M&A. “added Mr. Ling.
3287.99
1275.09
