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The Actuary The magazine of the Institute & Faculty of Actuaries

Chinese health insurance business to continue to soar

China’s health insurance sector will more than double in size over just five years amid ongoing demographic shifts, forecasts by analytics firm GlobalData suggest.

Rising health insurance penetration in China ©iStock

In a new report, GlobalData predicts direct written premiums in China’s health insurance sector to reach $136.6bn (CNY921.1bn) in 2022, compared with $64.7bn in 2017.

This marks a huge increase from the $16bn of written premiums in 2013, which registered a compound annual growth rate of 41.2% between then and 2017.

The report also reveals that health insurance – which contributes around 30% of total Chinese general insurance – is now the sector’s fastest-growing line of business.

“This is an opportunity for private insurers to tap into,” said GlobalData insurance analyst, Manisha Varma.

“China’s demographic shift, a decline in fertility and rise in aging, exerts pressure on the social healthcare system, which increasingly faces a challenge in terms of inadequate coverage and capacity.”

How direct written premiums in China’s health insurance sector are forecast to grow is shown below (CNY bn):

Source: GlobalData Insurance Intelligence Center
Source: GlobalData Insurance Intelligence Center

GlobalData said that private insurers are driving the momentum in terms of new product offerings in critical illness cover, as well as enabling online-based, short-term insurance policies.

This has played an important role in enhancing health insurance penetration, which is forecast to increase from 0.53% in 2017 to 0.74% in 2022.

The researchers said that the focus is on the retail consumer segment due to its predominant share in the health insurance business.

However, efforts are underway to promote the commercial segment as well. Recent regulatory support measures include tax exemptions and directions for specific product categories such as cancer control.

Varma continued: “The importance of the health insurance business is set to grow further with rising demand for healthcare and higher insurance penetration.

"By 2022, the share of health insurance is projected to reach 36% of the total general insurance business.”

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