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