China’s role at the epicentre of COVID-19 will not impact its insurance market’s ability to drive growth.
Research by GlobalData found the insurance sector is already rebounding from the losses caused by Covid-19.
It said regulatory changes and the use of technology, has seen Chinese insurers already beginning to recover from the losses incurred due to the Covid-19 outbreak. Although the forecast growth rate between 2019 – 2023 has dropped post-Covid19, still, it maintains a strong growth.
The firm’s Covid-19 in China: Insurance Forecast Snapshot report reveals that the insurance industry will witness a revised growth rate with a compound annual growth rate (CAGR) of 6.1% between 2019 – 2023. However, the losses from COVID-19 have been felt with the figure down from the pre-pandemic estimate of 10.4%.
The report said the two factors aiding the recovery have been the reactions of the Banking and Insurance Regulatory Commission (BCIRC) and leading life insurer, Ping An.
Ping An has seen its number of customers decline by 9% to 1.1 million following the outbreak, but a tenfold increase in registrations for its online health consultation service. Its ‘Good Doctor’ application has seen 1.1 billion registrations for health consultations since the outbreak.
Ben Carey-Evans, Analyst of Insurance at GlobalData, explained: “These are extraordinarily difficult times for all businesses, and Ping An losing so many customers is no surprise. It is impressive that it has managed to extend its reach way beyond its customer base via its digital ‘Good Doctor’ app. It is already the leading life insurer in China, and it has now direct access to 1.1 billion people through this app.”
The report said the BCIRC has been quick to respond as it fast-tracked approval for new low-cost insurance products. These have premiums of between 15-30% less than the standard critical illness products. This is expected to expand the reach of insurance, and GlobalData forecasts these products to have a penetration rate of 2.7% by 2023.
Mr Carey-Evans concludes: “The insurance industry around the world is likely to see significant changes following this pandemic. Insurers will not be able to reset to how it was before when it eventually blows over. Early examples from China suggest more affordable policies to increase the reach of insurance and access to digital services like virtual GPs will be key to bringing consumers back into insurance.”