Foreign life insurers face tough rivals
By Zhang Fengming |
September 2, 2009, Wednesday
|
Print Edition
Print Edition
FOREIGN life insurers are less optimistic about grabbing a big share of the local market by 2012 amid strong competition from domestic rivals, an industry survey said yesterday.
Overseas life insurers expected their market share to rise to 8 percent by 2012 from the first-half's 4.7 percent - a less optimistic expectation than previous surveys - said PricewaterhouseCoopers yesterday in an industry survey of the majority of overseas insurers in China.
"The year of 2008 has been a difficult year for foreign insurers in China, not only because of the general slowing of the Chinese economy, but also because the large domestics have proved more resilient to the slowdown compared with their foreign competitors," said PricewaterhouseCoopers.
The accounting firm said there are a number of reasons for this, including the shift in consumer demands from investments linked products to protection-based products.
The respondents said their domestic competitors are becoming increasingly innovative and continue to improve their operations, as well as enjoying in-depth local market knowledge.
Banks' entry into the insurance market also pose a significant challenge for insurers, the survey said.
Bancassurance has become a major distribution channel for many insurers in the past several years. As banks are allowed to enter the insurance market, insurers are under pressure as they anticipate significant changes in distribution systems, the survey said.
Property and casualty insurers with overseas investments expect to increase their market share to 2 percent by 2012 from the current 1.2 percent.
Overseas life insurers expected their market share to rise to 8 percent by 2012 from the first-half's 4.7 percent - a less optimistic expectation than previous surveys - said PricewaterhouseCoopers yesterday in an industry survey of the majority of overseas insurers in China.
"The year of 2008 has been a difficult year for foreign insurers in China, not only because of the general slowing of the Chinese economy, but also because the large domestics have proved more resilient to the slowdown compared with their foreign competitors," said PricewaterhouseCoopers.
The accounting firm said there are a number of reasons for this, including the shift in consumer demands from investments linked products to protection-based products.
The respondents said their domestic competitors are becoming increasingly innovative and continue to improve their operations, as well as enjoying in-depth local market knowledge.
Banks' entry into the insurance market also pose a significant challenge for insurers, the survey said.
Bancassurance has become a major distribution channel for many insurers in the past several years. As banks are allowed to enter the insurance market, insurers are under pressure as they anticipate significant changes in distribution systems, the survey said.
Property and casualty insurers with overseas investments expect to increase their market share to 2 percent by 2012 from the current 1.2 percent.
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