Asia is becoming a major player with four Chinese financial services companies listed among

the top 21 global companies last year by market capitalisation.

In the recent times, China has moved ahead of the Indian insurance sector. India opened the

market to private players in 2000 while China did that a decade earlier. Apart from India

and China, which are putting Asia on a global scale, other countries like Japan and Hong

Kong are also increasingly diversifying their insurance sectors. Japan is home to some of

the largest Asian insurers, and has an urgent desire to expand its client portfolio across

the region. The insurance sector in this region has seen Western financial services

companies compete for Asian assets. However, regional companies – especially from Japan and

China – are expected to become more dominant in this market over the next few years. In the

year 2007, Hong Kong saw the greatest amount of M&A transactions in their insurance sector.

Due to globalization, deregulation, and terrorist attacks, the insurance industry has gone

through a tremendous transformation over the past decade.

Asian Insurance Focus: India & China

New Delhi, 28th August 2008:

Globalization is the key source which is bringing about an "irreversible transformation" in

the Asian insurance market. India and China are "dynamically" driving the growth of

insurance markets in Asia. This process has been expedited by the "soothing impact" of the

Asian financial crisis on reform resistance and its contribution towards acceleration of

change, including deregulation, particularly "on the back of gradual opening up of two of

the most important growth markets - China and India," says the study conducted by Swiss Re,

one of the world's leading reinsurers.

Asia is becoming an important growth engine for global insurers due to the changing socio-

economic dynamics. According to a latest research report from HSBC, in order to be long-

term winners, life insurance companies in Asia need to diversify their income streams such

that at least 25% of earnings are sourced overseas, while maintaining a dominant position

in the domestic market.

Many Asian financial services companies have exceeded the overall growth rate for their

domestic economies and are therefore looking to expand globally or invest their shares in

new markets. Another trend predicted by PwC, was that intra-Asian trade would continue to

increase, particularly as the West decreased its investment in this region. The increasing

wealth and educational development in Asia, has built a good foundation for the development

of financial services.

China is the major hand behind the dynamic growth in the Asian insurance sector. Being the

world’s largest untapped insurance market, it has the GDP growth of over 10% per annum,

rapid economic development and a burgeoning consumer class. It has been the fastest-growing

nation for the past quarter of a century, and its economy is the 4th largest in the world

after the US, Japan and Germany, with a nominal GDP of US$3.42 trillion (2007) when

measured in exchange-rate terms. Several factors like China’s aging population; high

savings rate and poor social security systems as well as an increasing number of wealthy

consumers segment, are responsible for this astounding level of growth.

However, India has also significantly contributed towards the development of the insurance

sector in Asia. Indian economy is the 12th largest in the world, with a GDP of $1.25

trillion and 3rd largest in terms of purchasing power parity. With factors like a stable 8

-9 per cent annual growth, rising foreign exchange reserves, a booming capital market and a

rapidly expanding FDI inflows, it is on the fulcrum of an ever increasing growth curve.

Between 2000 and 2007, it had an increase of 120% and reached $47.89 billion, and the CAGR

growth during this time frame has been 11.96%. It was one of the most consistent growth

patterns that the Knowledge Centre has noticed in any other emerging economies in Asian as

well as Global markets. 

Competitive Landscape:

Some of the largest US, Japanese and French insurers focus exclusively on their home

markets. However, multi-national groups who have ‘international’ businesses almost

invariably have operations in the Asia-Pacific region, if only because of the size and

growth potential of many of the national markets.

Under the Life Insurance Sector, AIG is the biggest in Asia, in terms of country presence

and premiums. ING comes second by premiums. However, globally, Prudential tops the list,

being the most dependent on the region.

Among the non-life insurance cos., regional player Mitsui Sumitomo, leads the property and

casualty side.

Major Driving Factors:

=> Globalization
=> Deregulation which is opening up the markets
=> Cheaper and more effective distribution channels
=> Ongoing industry consolidation
=> Increment in the policy holder firms
=> Boost in Merger and Acquisitions activities
=> Changing socio-economic dynamics
=> Market offering wider margins
=> Unique combination of size, age profile and growth prospects
=> Many more..

Major Issues, Trends and Opportunities

=> Continuous increment in intra-Asian trade
=> Need for diversification in the income streams
=> Rise in selling investment type products like annuities
=> Chance to compete directly with financial services companies
=> Focus on paying out more in claims
=> Drastic increment in marine and cargo insurance sectors
=> Developments in countries, who were closely regulated by their government
=> Lack of proper agent quality
=> Change in the distribution method
=> Difficulties in building networks and brands
=> Hindrance in expansion in some of the emerging markets
=> Risk management concerns in insurance companies
=> Global Expansion
=> Transformation in the organizational system to win customer loyalty
=> Weak equity markets
=> Impact of sub-prime
=> Regulatory and market obstacles in the emerging markets

Topics covered in the report

=> Overview of the Asian Insurance Sector
=> Trends analysis of the Asian economy
=> Asia’s economic presence as compared to other countries
=> Trend analysis of Chinese economy & macroeconomic factors contributing to the growth of the sector
=> Market performance and forecast of insurance sector (total, life & non-life) since 1996 till 2007
=> Key issues & challenges, major trends & opportunities in the Chinese insurance sector
=> China’s position in the context of emerging countries, and driving factors
=> Company profiles of the top players in China
=> Trend analysis of Indian economy and growing macroeconomic trends
=> Market overview, performance & forecast (total, life & non-life) since 2000 till 2011
=> Growth drivers, key issues, challenges, major trends & opportunities in the Indian insurance sector
=> Government’s initiatives to promote & regulate the insurance market
=> India’s position in the context of emerging countries
=> Company profiles of the top players in India

Table of Contents

SECTION I: INSURANCE – AN OVERVIEW 
1. INSURANCE - AN INTRODUCTION 
      1.1 KEY RATIOS/TERMS 
      1.2 LIFE INSURANCE 
                1.2.1 Types of Life Insurance Products 
                1.2.2 Tax and Life Insurance
      1.3 GENERAL / NON-LIFE INSURANCE 
                1.3.1 Types of Non-Life Insurance Products 
                1.4 TYPES OF INSURANCE COMPANIES
SECTION II: ASIAN INSURANCE SECTOR 
1. MARKET OVERVIEW 
        1.1 ASIAN INSURANCE MARKET SIZE 
        1.2 ASIAN LIFE INSURANCE MARKET 
        1.3 ASIAN NON-LIFE INSURANCE MARKET 
2. MAJOR ISSUES, TRENDS AND OPPORTUNITIES 
3. PORTER'S 5 FORCES ANALYSIS 
       3.1 THREAT OF NEW ENTRANTS / ENTRY BARRIERS 
       3.2 SUPPLIER POWER 
       3.3 BUYER POWER
       3.4 AVAILABILITY OF SUBSTITUTES 
       3.5 COMPETITIVE / INTERNAL RIVALRY
4. COMPETITIVE LANDSCAPE 
SECTION III: CHINESE INSURANCE SECTOR 
1. CHINA – AN INTRODUCTION 
      1.1 CHINESE ECONOMY 
                 1.1.1 Macroeconomic Trends 
                 1.1.1.1 Shift to a maturing economy 
                 1.1.1.2 Growth of the consumer class
                 1.1.1.3 Growing GDP 
                 1.1.1.4 Outward FDI 
                 1.1.2 Government Policies 
                          1.1.2.1 Three-Step Regional Development Strategy
                          1.1.2.2 The 11th Five-Year Program (2006-2010)
                          1.1.2.2 Development of Energy-Efficient Society 
2. CHINESE INSURANCE SECTOR 
      2.1 MARKET OVERVIEW 
                    2.1.1 Insurance Sector vs. Macro-Economic Factors 
                    2.1.2 Market Constituents 
      2.2 MARKET PERFORMANCE & FORECAST (1996-2011) 
                   2.2.1 Chinese Insurance Market 
                            2.2.1.1 Chinese Life Insurance Market 
                            2.2.1.2 Chinese Non-Life Insurance Market 
      2.3 TRENDS, ISSUES AND OPPORTUNITIES – AN ANALYSIS      
                   2.3.1 Demand from Commercial Property Segment 
                   2.3.2 Increasing Population and Prospective Buyers 
                   2.3.3 Middle-men or Broker Market 
                   2.3.4 Entry of Banks 
                   2.3.5 Increasing risk awareness & demand for innovative products
                   2.3.6 Guarantee rate reform 
                   2.3.7 Development of domestic reinsurance markets 
                   2.3.8 Regulatory obstacles 
                   2.3.9 Other major issues & trends 
                             2.3.9.1 Improved expertise of local insurers 
                             2.3.9.2 Need for Specialist Expertise 
                             2.3.9.3 Industry and Markets with Best Prospects for Insurance Products 
                             2.3.9.4 Government Regulations 
       2.4 COMPETITIVE LANDSCAPE 
                     2.4.1 Market Segmentation 
                     2.4.2 Competition in Life Insurance Sector 
                      2.4.3 Competition in Non-Life Insurance Sector 
                     2.4.4 Driving Factors 
                             2.4.4.1 Increase in reinsurance treaties 
                             2.4.4.2 Increased expertise will drive competition in specialist classes        
                             2.4.4.3 Ownership changes are driving improved performance     
                             2.4.4.4 Treaty capacity has driven competitiveness
                             2.4.4.5 Growth of local reinsurance capacity 
                               2.4.4.6 CIRC is promoting increased local market retentions
                               2.4.4.7 Local insurers are writing reinsurance business
                               2.4.4.8 Brokers are developing local reinsurance expertise
                      2.4.5 Company Profiles 
                                2.4.5.1 China Life Insurance Company Limited 
                                 2.4.5.2 China Pacific Insurance (Group) Co. Ltd. 
                               2.4.5.3 Ping An Insurance (Group) Company of China 
                               2.4.5.4 New China Life 
SECTION IV: INDIAN INSURANCE SECTOR 
1. INDIA 
      1.1 INDIAN ECONOMY 
                 1.1.1 Performance in FY2007 
                 1.1.2 Macroeconomic Trends 
                 1.1.3 Government Policies 
2. INDIAN INSURANCE SECTOR 
      2.1 MARKET OVERVIEW 
                   2.1.1 Insurance Sector vs. Macro-Economic Factors 
                   2.1.2 Market Performance & Forecast (2000-2011)
                            2.1.2.1 Indian Insurance Market 
                            2.1.2.2 Indian Life Insurance Market 
                            2.1.2.3 Indian Non-Life Insurance Market 
      2.2 DRIVING FACTORS 
                  2.2.1 Opening of Pension sector 
                  2.2.2 Growing Per Capita Income & Changing Demographics 
                  2.2.3 Macro-Economic and Demographic Growth Drivers
                  2.2.4 Other Major Drivers
                           2.2.4.1 Increasing FDI 
                           2.2.4.2 PPP infrastructure development 
                            2.2.4.3 Insurer quality and client education 
                           2.2.4.4 Catastrophe exposure 
      2.3 TRENDS, ISSUES AND OPPORTUNITIES – AN ANALYSIS 
                  2.3.1 Major Issues 
                          2.3.1.1 Reason for opening up the Insurance Industry 
                          2.3.1.2 Market Structure 
                          2.3.1.3 Role of IRDA 
                  2.3.2 Emerging Sectors for Insurance 
                           2.3.2.1 Healthcare insurance 
                           2.3.2.2 Pension Plans 
                  2.3.3 Emergence of Multiple Distribution Networks
                  2.3.4 Consolidation of Distribution Strategy 
                  2.3.5 Targeting niche customer base with customized products 
                  2.3.6 Stagnating premium growth and underlying opportunity 
                  2.3.7 The Deregulation of the Insurance Market in India (w.e.f. January 1, 2007) 
                  2.3.8 Proposed stages of removal of the tariffs 
                  2.3.9 Insurance sector driving Indian CRM market
                  2.3.10 Product Preferences among Consumers 
                  2.3.11 Success of Auto Insurance Sector 
                  2.3.12 Other major hurdles 
      2.4 GOVERNMENT REGULATIONS 
                   2.4.1 Insurance Acts 
                   2.4.2 Government backed insurance schemes 
                   2.4.3 Reforms in Insurance Sector 
                    2.4.4 Protection of the interest of policy holders 
      2.5 COMPETITIVE LANDSCAPE 
                   2.5.1 Competition in Life Insurance Sector 
                            2.5.1.1 Market Share & Segmentation 
                                2.5.1.2 Life Insurance - Five Forces Analysis 
                       2.5.2 Competition in Non-Life Insurance Sector
                                2.5.2.1 Market Share & Segmentation 
                                2.5.2.2 Non-Life Insurance - Five Forces Analysis
                       2.5.3 Company Profiles – Top Players 
                               2.5.3.1 Bajaj Allianz General Insurance Co. 
                               2.5.3.2 ICICI Lombard General Insurance Company
                               2.5.3.3 IFFCO-TOKIO General Insurance (ITGI) 
                               2.5.3.4 National Insurance Company Limited 
                               2.5.3.5 The New India Assurance Co. Ltd. 
                               2.5.3.6 The Oriental Insurance Company Limited 
                               2.5.3.7 Reliance General Insurance 
                               2.5.3.8 Royal Sundaram Alliance Insurance Co. Ltd 
                               2.5.3.9 Tata AIG General
                               2.5.3.10 United India Insurance Company Limited 
                               2.5.3.11 Bajaj Allianz Life Insurance Company
                               2.5.3.12 ICICI Prudential Life Insurance Company 

Pages: 301; Format: PDF
Authors: Akash Rakyan & Nishith Srivastava

List of Charts

Chart 1: Total Insurance Market ($ billion): Asia vs. India vs. China vs. Japan vs. Korea (2000-2011)
Chart 2: Rise in Market Share (%): Asia vs. India vs. China vs. Japan vs. Korea (2000-2011f)
Chart 3: Market Share of Top Insurance Markets (%): FY2000
Chart 4: Market Share of Top Insurance Markets (%): FY2011f
Chart 5: Total Insurance Market ($ billion): Asia vs. India vs. China vs. Japan vs. Korea (2000-2011)
Chart 6: Total Insurance Market ($ billion): Asia vs. India vs. China vs. Japan vs. Korea (2000-2011) 
Chart 7: China’s GDP Growth (1952-2005)
Chart 8: Macroeconomic Data & Factors
Chart 9: Total Premium Growth vs. GDP Growth (%) – 1996-2007e
Chart 10: Growth in China (%): Life vs. Non-Life vs. Total Premium vs. GDP (%) – 1996-2008f
Chart 11: China Insurance Market Value ($billion): 2000-2007e
Chart 12: China Insurance Market Value Forecast ($ billion): 2008-2011f
Chart 13: Chinese Insurance Market: Segment Share
Chart 14: Growth Trend of Life Insurance and Non-Life Insurance ($billion): 1996-2007e
Chart 15: GDP Growth vs. T. Premium Growth vs. Life Insurance Growth (%) – 1996-2007e
Chart 16: Life Insurance Market in China: 1996-2007 ($ billions)
Chart 17: Life Insurance Market in China: Forecast 2007-2011 ($billions)
Chart 18: GDP Growth vs. Total Premium Growth vs. Non-life Insurance Growth (%) – 1996-2008f
Chart 19: Sub-sector share of Non-life Insurance Market in China
Chart 20: Non-life Insurance Market in China: 1996-2007e ($ billions)
Chart 21: Non-life Insurance Market in China: Forecast 2007-2011 ($billions)
Chart 22: Market Share of Top 3 Domestic Life Insurance Companies
Chart 23: Market Share of Non-life Insurance Companies in China
Chart 24: Market Share of Reinsurers in China (2006)
Chart 25: GDP growth, per capita income and size of country by GDP in 2014
Chart 26: Indian Macroeconomic Data & Factors (2002-2011)
Chart 27: Government Debt- India (% of GDP)
Chart 28: Annual Inflation Rate (CPI) - India %
Chart 29: Total Premium Growth vs. GDP Growth (%) – 2000-2007e
Chart 30: Life Insurance vs. Non-Life Insurance vs. Total Premium vs. GDP (%): 2000-08f
Chart 31: India Insurance Market Value ($ billion): 2000-2007
Chart 32: India Insurance Market Value Forecast ($ billion): 2008-2011f 
Chart 33: India Insurance Market: Segment Share (2007e)Chart 34: India Life Insurance Market Value ($billion): 2000-2007
Chart 35: Asia-Pacific Life Insurance Market Segmentation: % share in 2006
Chart 36: India Life Insurance Market Share: % Share, by Value, 2006-2007
Chart 37: India Life Insurance Market Value Forecast ($billion): 2008-2011
Chart 38: India Non-Life Insurance Market Value ($billion): 2000-2007
Chart 39: India Non-Life Insurance Market Value Forecast ($billion): 2007-2011
Chart 40: Sub-Sector Share of Non-life Insurance Market in India (2007e)
Chart 41: India Non-life Insurance Market Share: % Share, by Value, 2006-2007
Chart 42: Market Share of Leading Life Insurance Companies in India – 2007
Chart 43: India Life Insurance Market Segmentation (%share & $bil. value): 2010-2011
Chart 44: India Non-Life Insurance Market Segmentation (%share): 2006-07
Chart 45: India Non-Life Insurance Market Segmentation (%share): 2010-2011

List of Tables

Table 1: Total Insurance Market ($ billion): Asia vs. India vs. China vs. Japan vs. Korea (2000-2007)
Table 2: Total Insurance Market ($ billion): Asia vs. India vs. China vs. Japan vs. Korea (2008-2011f)
Table 3: Rise in Market Share (%): Asia vs. India vs. China vs. Japan vs. Korea (2000-2007)
Table 4: Rise in Market Share (%): Asia vs. India vs. China vs. Japan vs. Korea (2008-2011f)
Table 5: Asian Life Insurance Market Value ($billion): 2000-2007
Table 6: Asian Life Insurance Market Value ($billion): 2008-2011
Table 7: Asian Non-Life Insurance Market Value ($billion): 2000-2007
Table 8: Asian Non-Life Insurance Market Value ($billion): 2008-2011
Table 9: Macroeconomic Data & Factors
Table 10: Chinese GDP vs. US Dollar exchange vs. Inflation Index
Table 11: Total Premium Growth & GDP Growth (%) – 1996-2007e
Table 12: Growth in China (%): Life Insurance vs. Non-Life Insurance vs. T. Premium vs.GDP (%) 1996-2008f
Table 13: China Insurance Market Value & Forecast ($ billion): 1996-2011f
Table 14: Growth Trend of Life Insurance and Non-Life Insurance ($billion): 1996-2007e
Table 15: GDP Growth vs. Total Premium Growth vs. Life Insurance Growth (%) – 1996-2007e
Table 16: Life Insurance Market in China: 1996-2007 ($ billions)
Table 17: Life Insurance Market in China: Forecast 2007-2011 ($billions)
Table 18: GDP Growth vs. Total Premium Growth vs. Non-life Insurance Growth (%) – 1996-2008f
Table 19: Non-life Insurance Market in China: 1996-2007e ($ billions)
Table 20: Non-life Insurance Market in China: Forecast 2007-2011f ($billions)
Table 21: Top Domestic and Foreign-Invested Life Insurance Firms in China
Table 22: Top Domestic and Foreign-Invested Non-Life Insurance Firms in China
Table 23: Indian Macroeconomic Data (2002-2011)
Table 24: Total Premium Growth & GDP Growth (%) – 2000-2007
Table 25: Growth (%): Life Insurance vs. Non-Life Insurance vs. Total Premium vs. GDP (%) – 2000-2008f
Table 26: India Insurance Market Value ($billion): 2000-2007
Table 27: India Insurance Market Value Forecast ($ billion): 2008-2011f
Table 28: India Life Insurance Market Value ($billion): 2000-2007
Table 29: Asia-Pacific Life Insurance Market Segmentation: % share in 2006
Table 30: India Life Insurance Market Share: % Share, by Value, 2006-2007
Table 31: India Life Insurance Market Value Forecast ($billion): 2008-2011
Table 32: India Non-Life Insurance Market Value ($billion): 2000-2007
Table 33: India Non-Life Insurance Market Value Forecast ($billion): 2007-2011
Table 34: India Non- Life Insurance Market Share: % Share, by Value, 2006-2007
Table 35: Composition of Indian Household Financial Savings
Table 36: India Insurance Market Segmentation (%share & $billion values): 2006-2007
Table 37: India Insurance Market Segmentation (%share & $billion value): 2010-2011
Table 38:  Market Share of leading life insurance companies in India (% share) – 2007
Table 39: India Life Insurance Market Segmentation (%share & $billion value): 2010-11f
Table 40: India Non-Life Insurance Market Segmentation: 2006-07
Table 41: India Non-Life Insurance Market Segmentation ($billion value): 2010-2011

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