According to GlobalData’s Global Insurance Database, China’s total insurance industry will reach $857,072m in gross written premiums by 2022, making China one of the fastest-growing insurance markets globally. With the China Insurance Regulatory Commission loosening regulation, foreign insurance companies are increasingly looking at the country as a strategic market to grow their business.

Allianz was the first foreign insurer to receive a fully operational license in 2019. However, despite strong market potential, GlobalData’s research shows that the top 10 domestic insurers accounted for 72.2% of total general premium income in 2017.

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This means China is an extremely competitive market to enter, and securing a license to operate will only be the beginning of foreign insurers’ struggles. The biggest challenge will be understanding the Chinese market and Chinese customers. This is easier said than done, as foreign juggernauts including Google, Amazon, Uber, eBay, and Airbnb have all found out the hard way.

I interviewed a group of small business owners in China on their views of foreign insurers in the market. There was a consensus that foreign companies are quick to blame government controls for their struggles, whilst failing to realise that their products and services are not suitable for the target audience. They also said that when it comes to insurance they are looking for convenience. Interviewees expressed satisfaction with the increasing lack of human interaction in the insurance industry, and the integration of services that do not require them to download a separate app.

Although it could be argued that a similar sentiment exists in the UK, the key difference is market acceptance of digitised services. According to GlobalData’s 2019 UK Insurance Consumer Survey, only 30% of respondent are either using or would be interested in using more technology to purchase insurance premiums. In contrast, Chinese insurers such as Ping An and People’s Insurance Company of China are increasingly acting more like tech companies, focusing their efforts and resources on reaching customers online. For example, in 2019 Ping An committed to spend $22bn over the next decade on technology and services delivery. It should also be mentioned that China currently has 854 million internet users, almost double the amount of Europe and the US combined. This puts into perspective the amount of resources foreign insurers would need to invest just to establish a market presence in China – let alone compete.

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