Double-digit growth forecast for Chinese property insurance industry in 2024
The Chinese property insurance industry is expected to grow by 12.3% in 2024, supported by positive regulatory developments and an increase in demand for fire and home multi-risk property insurance policies due to frequent nat cat events, according to GlobalData.
Manogna Vangari, Insurance Analyst at GlobalData, said: “The Chinese property insurance industry witnessed a growth of 15.9% in 2023 due to higher demand for policies covering nat cat events, growing demand for agriculture insurance, and investments in infrastructure projects. The trend is expected to continue in 2024, which will support property insurance growth.”
Looking ahead, GlobalData forecasts the Chinese property insurance industry to grow at a compound annual growth rate of 12.1% over 2024-28, from CNY271bn ($40.5bn) in 2024 to CNY428.3bn ($67.7bn) in 2028, in terms of gross written premiums.
Agricultural insurance is the largest product within the property insurance segment and is estimated to grow by 15.3% in 2024. The growth in agriculture insurance will be supported by an increased frequency of extreme climate conditions such as heat waves and heavy rains in the country.
Vangari said: “Regulatory reforms aimed at streamlining online operations and improving the actuarial system of agriculture insurance will help in increasing agriculture insurance uptake and support the growth of property insurance.”
GlobalData noted that in May 2023, the Insurance Association of China issued new standards to unify the online operation of agricultural insurance underwriting and settlement. “The implementation of new guidelines will help local regulatory agencies and insurance institutions with faster underwriting and claim settlements, and improve the overall management of agricultural insurance,” said the firm.
And last year, the China Banking and Insurance Regulatory Commission announced new regulations on a trial basis to improve the agricultural insurance actuarial system. The regulator also asked insurers to expand their agricultural insurance coverage and products, improve agricultural-related insurance underwriting and claim settlement efficiency, and develop insurance products that meet the needs of farmers, said GlobalData.
The firm said property insurance growth will also be supported by increasing construction activities in the country. Between 2024 and 2027, the government plans to increase infrastructure spending by CNY924.2bn ($137bn). The Chinese construction industry is expected to register a growth of 2.8% in 2024, supported by investment in development programs, energy, and utilities investment, and infrastructure projects.
Vangari said: “China’s property insurance segment is poised for strong growth, driven by favourable regulatory developments, increasing demand for agriculture insurance policies, and growing construction activities. However, economic and geopolitical uncertainties as well as high nat cat losses will remain major challenges for property insurers over the next five years.”
