China’s online insurance sector growing at record pace

China’s online insurance sector growing at record pace | Insurance Business Asia

China’s online insurance sector growing at record pace
As China’s e-commerce sector booms the online insurance industry faces several great opportunities for growth. Low penetration rates and the country’s huge population are some of the factors working in the industry’s favour currently.
 
Last year, the online insurance sector earned RMB234.7 billion (US$33.93 billion) in premiums, compared to RMB3.2 billion (US$462.7 million) in 2011. This is a huge increase of 7234.4% in just five years. Additionally, insurance penetration rate rose from 0.22% to 7.58% in the same time period.

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More than a dozen start-up online insurers in China have raised over RMB1 billion in total funding in the past year, according to a report by Chuancai Securities. Auto insurance and wealth management products remained the two top online insurance products, while life insurance still had a small share of the pie.
 
However, most online insurers have shifted their focus from B2C (business-to-consumer) to B2B (business-to-business) after encountering difficulty in getting clients and generating income from the general public. An industry insider said that it is easier to gain and keep corporate clients and insurance agents.
 
 
The anonymous source added that the biggest dangers to online insurance companies are not the giant companies traditionally engaged in insurance, but large companies that are new entrants to the industry such as Alibaba and JD. The arrival of these firms drives intense competition which could overrun smaller firms.


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