China Will be Second in Life Insurance

by Vanessa Jones on  December 19, 2012 at 3:34 PM Health Insurance News   - G J E 4
China is set to become the second largest in the World in the Life Insurance Market - according to McKinsey. They will have a total market capitalization of 406 billion.
China Will be Second in Life Insurance
China Will be Second in Life Insurance

The second spot was held by Japan, though China is bound to see a 10% hike in the next 5-10 years.

Senior partner at McKinsey - Stephen Binder, co writer of a book, said, "China's rising middle class, of which there are expected to be 500 million by 2025, has been gradually shifting financial assets from low-paying deposits into higher-yielding investments, creating new opportunities for the insurance sector."

Binder also mentioned, "By 2015, the middle-class group in both first-tier and second or third-tier cities will represent 30 percent of the urban population, contributing more than 30 percent to the growth of the life insurance market."

Middle class families - especially new parents were majority of the clients - they contributed to 30% of the growth. Parents were buying education, investment and life insurance for their 2 year old child.

Future insurance companies would need to work with banks to sell their products. Binder also felt "To succeed in China, foreign insurance firms need to follow a clear and consistent strategy that avoids the tendency to sacrifice long-term health for short-term performance." Foreign companies needed to study the people and understand them and they could offer them personalized products to succeed in the competition.

Source: Medindia

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