China’s general insurance industry is forecasted to grow at a rate of 3.8 percent in 2020 amid the coronavirus pandemic, according to UK-based data and analytics company-GlobalData.
The market recorded a growth rate of 5.7 percent in 2019.
The GlobalData report revealed that China’s general insurance industry is predicted to grow at a compound annual growth rate (CAGR) of 5.2 percent during 2019-2023. However, prior to the pandemic, the industry was expected to grow at a rate of 8.6 percent.
Sangharsan Biswas, Insurance Analyst at GlobalData, told the media, “Despite signs of recovery, the Chinese economy continues to grapple with sluggish business activity as new cases of infection are being reported. The recent floods will further dampen economic growth, resulting in lower premium growth for general insurers.
“The ongoing economic uncertainty compounded by the second wave of infections and worsening global trade scenario is expected to slow down growth in China’s general insurance industry. Despite push from regulators for a faster recovery, it is expected to be a protracted one.”
The report further revealed that the slowdown is mostly evident in the motor insurance segment followed by property insurance. Sales of new vehicles as well as new residential units in China declined due to the pandemic during the first half of the year.
It is reported that, China is also looking to restructure its medical insurance system. The restructuring is expected to impact nearly 300 million Chinese residents.
In August, China’s National Healthcare Security Administration, a sub-ministry-level government agency managing China’s public health insurance programmes, published a draft to reshuffle the urban employee basic medical insurance system.