COVID-19 has been found to accelerate the trend of consumers in China purchasing insurance online, particularly for the health sector. This creates a growing opportunity for insurers and the country’s online health insurance market is expected to expand at an average of 43% per annum until 2025 according to Swiss Re Institute in its latest sigma report.
The report stated that the digital insurance sector in China is booming and health covers are one of the top three products that consumers want to buy online.
All-sector online insurance premiums reached CNY269.6bn ($28bn) in 2019 which reflects an average annual growth rate of 45% from CNY29.1bn in 2013 (when this data was first published).
Last year, online health insurance premiums were up 92% from 2018, the fastest growing of all business lines, to CNY23.6bn. The segments’ share of all-sector online premiums continued to rise to 8.8% from 6.4% in the previous year.
According to Swiss Re, the growth can be attributed to advances in InsurTech, the infrastructure behind digital insurance as well as to consumers’ rising risk awareness and greater internet access.
However, the COVID-19 experience is expected to boost take-up of digital insurance further. The pandemic has heightened consumers’ health awareness, increasing demand for health cover.
At the same time, lockdown measures have hindered agent sales this year, the predominant distribution channel, and consumers are increasingly seeking contactless online routes for services from health consultations to purchases of tailored insurance particularly health policies.
The report therefore anticipates online health insurance premiums will comprise a 20% share of all-sector online premiums by 2025, up from 10% in 2020.