Chapter 2 The Overview of China’s Insurance Market
2.3 The Comparison between Life and Property Insurance Market
2.3.2 The Insurance Participants
In 2010, the total asset of insurance business in China is up to RMB 4,523 billion and increasing 22% compared to the same period in 2009. The total asset of foreign companies reaches RMB221.9 billion. As for the volumes of insurance companies, there are113 insurance companies, including 52 property insurance companies and 69 life insurance companies. Also, there are 9 reinsurance companies and 8 insurance
Note: The volume is counted until June 2010.
Source: Taiwan Insurance Institute, China’s Insurance Market Research, https://fsr.tii.org.tw/iiroc/fcontent/research/research02.asp
Next, concentration within China's insurance market is high. In life insurance market, the China Life Insurance Company has around 32.65% of the market, and the top three life insurance companies occupy more than 57.2% of the market. Life insurance companies have begun to increasingly adjust their business structures to progress the proportion of limited-payment premiums available.8 China’s property insurance market concentration is very high as well, with PICC occupying 39% of the market. The top three insurance companies take up over 66% of the entire property market. Foreign joint-venture life insurance companies have a smaller share, accounting for 5.15% of the life insurance market, and the top three foreign life insurance companies are Generali China Life Insurance Company Limited, American International Group, Inc. (AIG) and Huatai Life Insurance Company Ltd. The property insurance market share of foreign property insurance companies is only 1.02%; the top three foreign property insurance companies are Chartis Insurance
8 See “China Insurance Market and Technology Overview 2008,” Celent Report, May 28, 2008, available at http://reports.celent.com/
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Company China Limited (AIU),9 Mitsui Sumitomo Insurance (China) Company, Ltd., and Tokio Marine & Nichido Fire Insurance Co. (China) Ltd.
Table 2-3: The Market Share of Life Insurance Companies in China─2010
Life Insurance Companies Market Share (%)
China Life Insurance Company 32.65
Ping An Life Insurance Company of China, Ltd 15.31
Xinhua Life Insurance Company Limited 9.24
Other Chinese Life Insurance Companies 37.65
Foreign Life Insurance Companies 5.15
Note: The data is counted until June 2010.
Source: Taiwan Insurance Institute, China’s Insurance Market Research, https://fsr.tii.org.tw/iiroc/fcontent/research/research02.asp
Table 2-4: The Market Share of Property Insurance Companies in China─June 2010
Property Insurance Companies Market Share (%)
PICC Property and Casualty Company Limited 39
Ping An Property & Casualty Insurance Company Of China Ltd. 14.36
China Pacific Property Insurance 12.96
Other Chinese Property Insurance Companies 32.66
Foreign Property Insurance Companies 1.02
Note: The data is counted until June 2010.
Source: Taiwan Insurance Institute, China’s Insurance Market Research, https://fsr.tii.org.tw/iiroc/fcontent/research/research02.asp
Currently, foreign life insurers gain better than their non-life counterparts. AIA, the life insurance arm of AIG in China, is a superior benchmark of foreign life insurers’ influence in the industry. AIA’s relative achievement in China is on account of its long presence in the country. It started life insurance operations in Shanghai in 1992 and had gone in other cities previous to that. As such, the pace of AIA’s growth
9 Chartis Insurance Company China Limited is a China registered wholly owned property & casualty subsidiary of Chartis. The year of 2007 heralded an important milestone for the Company in China. In July of 2007, the CIRC approved the conversion of its branches in China into a wholly owned subsidiary. Chartis China is currently the largest foreign property-casualty insurer in China. See http://www.chartisinsurance.com.cn/en/aboutus/about_aiu.html
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in China is a much more valid benchmark to measure the development of foreign insurers (Zhao and Liu, 2007).
On the other hand, the performance of foreign non-life insurance businesses was rather disappointing. In 2009, Chartis Insurance Company China Limited (AIU), the non-life insurance arm of AIG, was ranked first among all foreign non-life insurers with a premium of RMB0.8 billion. However, it only takes up among all non-life insurers in China with a market share of 0.27%. Foreign firms have faced a tough market in the past few years. According to the PricewaterhouseCoopers report, foreign insurers in China, the market share for overseas life insurance companies was around 5 %, while property and casualty firms only had 1 percent (Zhang, 2010).
As the percentage showed in the following table, foreign life insurers accounted for 5.23% of China’s life insurance market in 2009 as compared to only 2.64% in 2004, whereas foreign non-life insurers merely accounted for 1.06% of China’s non-life market share in 2009 and a figure that keeps unchanged as compared to 2004.
Table 2-5: The Comparison of Insurance Market Share between Chinese Insurance Companies and Foreign Insurance Companies─2004-2010
Year Chinese Property Insurance (%)
Foreign Property Insurance (%)
Chinese Life Insurance (%)
Foreign Life Insurance (%)
2004 98.79 1.21 97.36 2.64
2005 98.69 1.31 91.10 8.09
2006 98.79 1.21 94.09 5.91
2007 98.84 1.16 92.00 8.00
2008 98.82 1.18 95.08 4.92
2009 98.94 1.06 94.77 5.23
2010 98.98 1.02 94.85 5.15
Note: The data is counted until June 2010.
Source: Taiwan Insurance Institute, China’s Insurance Market Research, https://fsr.tii.org.tw/iiroc/fcontent/research/research02.asp
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economic development has started off mainly from the deliberate geographic concentration of financial motivations, resources, investment, and people in the coastal areas to understand economies of scale and specialization. Realizing this spatial element of China’s economic policy is important to knowing the grounds behind the country’s unbalanced development model.The spatial development of China’s insurance market follows the economic growth model and also has the unbalanced issues. No matter in life or property insurance business, most of the premium income comes from the big cities or coastal provinces.
Table 2-6: The Top Ten Areas of Insurance Premium Income in China─2009
Unit: RMB billion
Note: The accident insurance premiums and health insurance premiums are not included.
Source: China Insurance Regulatory Commission, the Statistics of Premium in Different Areas of China, http://www.circ.gov.cn/web/site0/tab61/
10 Yukon Huang is a senior associate in the Carnegie Asia Program, where his research focuses on China’s economic development and its impact on Asia and the global economy.