China's life insurance premiums to reach 100 bln US dls in 2008,expert says

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Last updated at: (Beijing Time) Thursday, March 11, 2004

China's life insurance premiums to reach 100 bln US dls in 2008,expert says

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The China branch of the Boston Consulting Group (BCG), a leading international business strategy consultancy, on Wednesday released a research report which predicts that China's insurance market will develop into the world's biggest in the next 20 years.

If the life insurance business can secure a compound annual growth rate of around 20 percent over the next four years, total premiums will reach about 830 billion yuan (about 100 billion US dollars) by 2008, says the report.

Giles Brennand, BCG's vice president, who is also the author ofthe report, explained that the strong growth of China's life insurance business should be attributed to the expansion of Chinese urban residents' financial assets.

Though the life insurance's 2.5 percent penetration rate, the percentage ratio between the total premium of life insurance and GDP, is still much lower than the world average of 5 percent, China's life insurance sector has witnessed rocketing growth from 0.5 percent in the late 1990's to 2.3 percent now, according to the report.

It also suggests the huge potential of China's insurance market,Brennand said.

China's group life insurance business, a lucrative arena for insurance practice, will open to foreign insurance companies at the end of 2004.

"In a long run, the winners, both domestic and foreign, will bethose players that best manage increasing customer demands, the evolving regulatory environment, and their own internal capabilities and resources," said Brennand.

He said the ability to offer superior, trustworthy and reliableservice to consumers, and cultivate the most profitable customers,will be critical to success.

Source:Xinhua

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