Life premiums to climb on aging needs
Print Edition
PREMIUMS in China’s life insurance sector may more than double in the next five years as insurers tap the rising needs of a wealthier and aging population, McKinsey & Co said in a report yesterday.
Premiums are set to grow by 15 percent annually in the next five years, up from 7 percent per annum seen in the past five years, McKinsey said.
“The insurance industry will be among the most watched industries in China in the next five years,” said Parker Shi, senior partner of McKinsey.
The firm estimated the affluent population to account for half of gross life premiums by 2020, up from 25 percent in 2011, and consumers, mostly young and professionals, will demand more protection and investment products.
However, as the number of retirees and aging population grows, medical and health insurance is set to boom as people become more aware of health issues.
McKinsey said China’s health care spending is set to grow from US$400 billion to US$1.4 trillion between 2014 and 2020, while the retiring population is likely to rise by around 3 percent over the next five years.
McKinsey also said — after analyzing data from 2004 to 2013 — that life insurance firms which focus on protection policies were more likely to profit than those which offer policies related to capital investment.
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