China’s health insurance market is projected to grow from RMB437.4 billion (US$64.7 billion) in 2017 to RMB921.1 billion (US$136.6 billion) in 2022, according to a report by data and analytics firm GlobalData.
The report, titled ‘China General Insurance: Key trends and Opportunities to 2022’, revealed that health insurance, which makes up around 30% of the total general insurance business in China, is the country’s fastest-growing line of business.
The sector’s direct written premium in health insurance, which registered a compound annual growth rate of 41.2% between 2013 and 2017, is projected to grow at 16.1% during the 2017-2022 period.
“China’s ongoing demographic shift, with a decline in fertility and a rise in aging, exerts pressure on the existing social healthcare system, which increasingly faces a challenge in terms of inadequate coverage and capacity,” Manisha Varma, insurance analyst at GlobalData said. “This is an opportunity for private insurers to tap into.”
According to the report, private insurers are driving momentum in terms of new product offerings in critical illness cover, as well as enabling online-based short-term insurance policies. This played an important role in enhancing health insurance penetration.
GlobalData also predicted that health insurance penetration will increase from 0.53% in 2017 to 0.74% in 2022. The retail consumer segment will be the focal point of growth, due to its predominant share in the health insurance business. Efforts are being made to cultivate the commercial segment, as well. Some recent regulatory support measures include tax exemptions and directions for specific product categories (such as cancer control).
“The importance of the health insurance business is set to grow further with rising demand for healthcare and higher insurance penetration,” said Varma. “By 2022, the share of health insurance is projected to reach 36% of the total general insurance business.”