China Insurance Industry Growth Slows

Amid tightening regulations, China’s insurance industry is growing more slowly.

Latest data from the China Insurance Regulatory Commission (CIRC) show that insurance-premium income in the first nine months of this year totaled 3.05 trillion yuan ($460 billion), up 21.01% from the same period in 2016. This year’s growth rate was 11.17 percentage points slower than last year’s.

Also in the first three quarters, life insurance plans saw the fastest growth, increasing 28.12% from the same period last year. Liability insurance also increased substantially, by 22.59%.

Other types of insurance — agricultural insurance; engineering insurance, which provides safeguards to construction projects; and personal health insurance — grew by 14.99%, 17.67% and 4.45% respectively.

The growth in the insurance industry as a whole is eclipsed by the surging popularity of online insurers. In the first three quarters, four online insurance companies — ZhongAn Online Property and Casualty Insurance, TK.cn Insurance, E An P&C Insurance, and Answern P&C Insurance — grew 133.77% year-on-year, fetching a total of 6.46 billion yuan in insurance premiums.

Insurers appear more cautious in fending off risks. In the first three quarters, the insurance industry saw its risk reserve funds increase 46.33% from the same period last year.

Insurers also made changes to their product mix. Life insurance products represented 49.38% of all personal insurance products in the first three quarters, increasing 13.18 percentage points from the end of last year. Meanwhile, universal life insurance — short-term policies with a small life insurance component that has been treated by many holders as investment products — made up 18.37% of all personal insurance products, a decrease of 18.48 percentage points year-on-year.

Insurance companies managed to earn returns of 581.43 billion yuan on invested capital, an increase of 20.41% year-on-year. Insurers kept 7.14 billion yuan in bonds and at the bank as deposits, representing 48.73% of invested capital. They kept 12.86% of their capital in stocks and funds, 9.40% in long-term equity investments, and 10.23% was held as creditors’ rights.

In total, property and personal insurance companies paid out 832.73 billion yuan in insurance claims, increasing 7.44% from the same period last year.

The total assets of the insurance industry increased to 16.58 trillion yuan, increasing 9.69% from the beginning of the year.

Contact reporter Liu Xiao (liuxiao@caixin.com)