Non-life insurers saw an average 20 percent earnings growth in the first three quarters, according to the China Insurance Regulatory Commission. Although that’s a decent expansion clip, the rise of web-based players is posing an increasing threat to incumbents.
The auto market, which generally accounts for 70 percent of the domestic property and casualty insurance business, remained vibrant during the period, but claims rose faster than premium income growth as rates have come under downward pressure amid the growing popularity of phone and internet marketing channels.
For the same amount insured, the auto insurance premium dropped nearly 7 percent on average in the nine months to September. The downtrend has no reversal in sight and premiums are more likely to decline further with the entry of Zhong An Online Property Insurance, the country’s first pure web-based insurer.
Zhong An has been drawing much attention since it was jointly founded by e-commerce giant Alibaba Group, technology behemoth Tencent (00700.HK) and emerging bancassurance player Ping An Insurance (02318.HK). By combining the three firms’ expertise in big data, information technology and insurance, Zhong An is expected to fire up competition in the market.
Non-life insurers capitalize on their ability to provide clients with real-time quotations and fast underwriting services on a wide range of standardized policies through their cost-efficient web-based operations.
Sector leader PICC Property & Casualty Co. Ltd. (02328.HK) may have to bolster its internet presence or risk losing business to the aggressive cyber newcomers.
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