For the complete report, get in touch with us at : info@netscribes.com Life Insurance market in China is poised to witness robust growth through 2015. The report begins with a brief description of the global life insurance market including the growth rate of the global life insurance sector along with a projected ranking of the top six life insurance markets globally. Further, the report covers a brief description of the life insurance market in China including the rate of market growth and the various segments of the life insurance market. A detailed time line description of the impact of liberalization on the life insurance market in China is also included in the report. The report also includes a detailed description of the various distribution channels operating in the life insurance market in China. Key drivers explain the factors influencing the growth of the life insurance market in China in detail. Some of the drivers identified include rise in middle class and increasing income, rise in ageing population, low market penetration and impact of liberalization. While major challenges facing the industry that impedes the development and growth of the life insurance market in China includes location challenge, recession in developed markets, complex market regulations and lack of human resource. Government initiatives section includes the measures adopted under the 12th Five Year Plan to develop the life insurance market in China. The section highlights the measures adopted by the life insurance industry measures as laid by the China Insurance Regulatory Commission (CIRC), the new regulations governing the life insurance market and investment regulations pertaining to the life insurance market in China. Emerging trends of the sector include the IPO pipeline, mergers and joint ventures, rise in bancassurance channel of insurance and product innovation. The report also contains a brief analysis of the competitive landscape of the life insurance market in China. This section provides a three dimensional analysis of the key players’ revenues, profits and market capitalization. The report also features brief profiles of the major domestic and foreign players operating in the market with a snapshot of their corporation, financial performance, and business highlights thus providing an insight into the existing competitive scenario. Key takeaway section summarizes the entire market in terms of opportunities, challenges and government initiatives persisting in the life insurance market in China. Key statistical figures relevant to the study include global life insurance market size and growth rate, life insurance market size by premiums collected (2005-2015e), key segments. Claims paid and premiums earned, share of Chinese urban household, per capita urban household income, life expectancy, ageing population of China, market penetration etc.

1. Life Insurance Market – China
January 2012

2. Executive Summary
 Life Insurance market is the fastest growing segment of the insurance industry in China
Market  A handful of domestic players dominate the insurance industry in China
 Foreign firms are stepping in the market primarily through joint ventures and mergers
Drivers: Challenges:
• Rise in Middle Class and Increasing • Location Challenge
Drivers &
Challenges
Income
• Rise in Ageing Population
•
•
LE
Recession in Developed Markets
Complex Market Regulations
P
• Low Market Penetration • Lack of Human Resource
• Impact of Liberalization
Government
Initiatives
 12th five year plan
 CIRC Measures
S AM
 Life Insurance Market Regulations
 IPO pipeline
 JV and M&A Landscape
Trends  Rise in Bancassurance
 Product Innovation
Major Players
Competition Company 1 Company 2 Company 3 Company 4
LIFE INSURANCE MARKET IN CHINA 2012.PPT 2

3. •Market Overview
• Global Market Scenario
• Domestic Market Scenario
LE
P
•Distribution Channels
M
S A
•Drivers & Challenges
•Government Initiatives
•Trends
•Competition
•Key Takeaway
LIFE INSURANCE MARKET IN CHINA 2012.PPT 3

4. Life insurance is one of the fastest growing segments of the
insurance sector in the worlds
Global Life Insurance Market ‐ Overview Global Life Insurance Premium – Growth Rate
• Global life insurance market grew by x% from 20‐‐ to USD bn
X%
Y bn in 20‐‐ 3,000
x1 x2
2,500
• Share of life insurance premium was a% of the total
2,000
LE
insurance premium collected in 20‐ ‐ 1,500
• USA ranked x in terms of life insurance premium 1,000
volume in 20‐‐ and is expected to rank y in 20‐‐
• China currently holds the y position and is expected
MP 500
0
Year 1 Year 2
‐
S A
to emerge as the z global life insurance market by 20‐
• Global life insurance market is expected to be highly
concentrated in n years time
Global Life Insurance Markets – Ranking
Countries 20‐‐ 20‐‐
• The top emerging market countries to dominate the USA a1 b1
global life insurance market by 20‐‐ are A, B, C, D and China a2 b2
E Japan a3 b3
• These countries are expected to have a x% share of France a4 b4
the life insurance industry of the emerging markets UK a5 b5
India a6 b6
Source: Note: Emerging Markets refers to an economy with low level of per capita income
LIFE INSURANCE MARKET IN CHINA 2012.PPT 4

5. Life insurance market in China is expected to witness a rapid
growth
Domestic Life Insurance Market ‐ Overview Life Insurance Premium – Growth Rate
• Insurance market in China has evolved into a large USD bn
and rapidly growing industry over the years 600 y4
500
• Life insurance is the largest segment by premiums Y%
400
LE
collected of the insurance industry in China 300 y3
200 y2
 Life insurance market is projected to grow to USD x bn in
20‐‐ from USD y bn in 20‐‐
• Domestic firms dominate the life insurance market in
MP 100
0
y1
Year 1 Year 2 Year 3 Year 4
China
• Rising competition by the foreign firms is a key
feature of the life insurance market S A Life Insurance – Market Segments (2010)
%
Claims paid Premium earned
• The life insurance market in China is dominated by a 100%
a1
a2 a3
large number of institutional regulations 80%
60%
• Ratio of the claims paid to the premiums earned is b1
40% b2 b3
lowest for the A segment compared to the B and C
20%
segments
0%
A B C
Source:
LIFE INSURANCE MARKET IN CHINA 2012.PPT 5

6. Life insurance market in China is divided into three major
segments
Domestic Life Insurance Market ‐ Segmentation
• Life insurance market in China is divided into three Share of Insurance Premiums (20‐‐)
segments
 X1
 X2 X1
D%
 X3 X2
LE
• Life insurance market in China accounts for x % of the X3
C%
P
total premiums of the overall insurance market B% X4
A%
• Share of X1 premium is the highest at y% of total
premiums collected
S AM
Market Structure
Insurance
A B
B1 B2 B3
Source:
LIFE INSURANCE MARKET IN CHINA 2012.PPT 6

7. Liberalization of the insurance market in China played a
major role in driving the market growth
• Aaa • Bbb
Year a Year b Year c Year d Year e Year f
• Ccc • Ddd • Eee • Fff • Ggg • Hhh
Source:
LIFE INSURANCE MARKET IN CHINA 2012.PPT 7

8. Drivers & Challenges – Summary
LE
Challenges
Location Challenge
Drivers
MP Recession in Developed Markets
A
Rise in Middle Class and Increasing
S
Income Complex Market Regulations
Rise in Ageing Population Lack of Human Resource
Low Market Penetration
Impact of Liberalization
LIFE INSURANCE MARKET IN CHINA 2012.PPT 8

9. Rise in middle class population coupled with a rise in
disposable income drives the life insurance market
Rise in Middle Class and Increasing Income Impact
•Finding 1
•Finding 2
•Finding 3
LE
MP
Share of Chinese Urban Households
a b c d e S A Per Capita Urban Disposable Income
USD
Y%
2,000
100 b1 c1 a1 x2
b2
a2 a3
a4
x1
80 d1 b3 1,500
c2
b4
60 d2 c3
1,000
40 e1 c4
e2 d3 500
20 d4
e3 e4
0 0
Year 1 Year 2 Year 3 Year 4 Year 1 Year 2
Source:
LIFE INSURANCE MARKET IN CHINA 2012.PPT 9

10. Rapid rise in the share of ageing population provides a
golden opportunity for market growth
Rise in Ageing Population Impact
• Finding 1
• Finding 2
• Finding 3
• Finding 4
LE
MP
Rise in Life‐Expectancy
Aaa
S A
Share of 80+ group (2010)
A B
Growth of Ageing Population (60+)
%
A%
20 a3
B% a2
Years X% 15 a1
80 x3
x1 x2 10
60
40 5
20 A%
0
0
Year 1 Year 2 Year 3
Year 1 Year 2 Year 3
Source:
LIFE INSURANCE MARKET IN CHINA 2012.PPT 10

11. Low penetration level of the life insurance market presents
a greater opportunity for growth
Low Market Penetration Impact
• Finding 1
• Finding 2
• Finding 3
P LE
Penetration Rate
S AM China ‐ Regional Penetration
% %
20 4 x1
a1
15 3
b1 x2
10 c1 2
x3
5 d1 1
0 0
A B C D X1 X2 X3
Source: Note:
LIFE INSURANCE MARKET IN CHINA 2012.PPT 11

12. Liberalization of the economy acts as a major driver of the
life insurance market
Impact of Liberalisation Impact
•Finding 1
•Finding 2
•Finding 3
•Finding 4
LE
MP
% A B
S A
Competition Mix – Key Regions Competition Structure (2010)
100% 1 4
a1 a2
80% 2 5
a6 a1 3 6
60%
40% b1 b2
20% a5
0% a4 a2
X Y a3
Source:
LIFE INSURANCE MARKET IN CHINA 2012.PPT 12

13. Summary – Trends
IPO Pipeline
LE
JV and M&A Landscape
MP
A
Trends
S
LE
Product Innovation Rise in Bancassurance
MP
S A
LIFE INSURANCE MARKET IN CHINA 2012.PPT 13

14. Domestic Competition – Summary (1/2)
Net Income Size of the Bubble represents Market Capitalization in USD mn
6,500
6,000
5,500
a1
5,000
LE
4,500
P
4,000
3,500
3,000
2,500
2,000
1,500 S AM c1
b1
1,000
500
0 Revenue
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000
A B C
Source: Note:
LIFE INSURANCE MARKET IN CHINA 2012.PPT 14

15. Domestic Competition – Summary (2/2)
Revenue and Profit for Major Domestic Companies
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000
USD mn
A
LE a1
P
a2
B
b2
S AM b1
c1
C
c2
X Y
Note:
Source:
LIFE INSURANCE MARKET IN CHINA 2012.PPT 15

16. Major Domestic Players in the Market (1/7)
Company Snapshot: Company 1
Corporate Information Financial Performance
Headquarters City 1, Country 1 Revenue
Revenue Profit
USD mn Profit / Loss USD mn
Founded 19‐‐
LE
80,000 8,000
x4
60,000 x3 6,000
x2
Products Product 1, Product 2, Product 3
Key People Name 1 –Designation 1
MP 40,000
20,000
x1 4,000
2,000
A
0 0
S
Year 1 Year 2 Year 3 Year 4
Business Highlights
• Company is a operating subsidiary of A
• Total premium income of the company till Oct 20‐‐ amounted to USDx bn
• After approval from the CIRC issuance of USDy bn subordinated debt was completed by the company in Oct 20‐‐
 Maturity period of the subordinated debt is fixed at a years with an interest rate of b% for the first c years
 Proceeds from the issuance will be used to raise solvency ratio and raise supplementary capital of the company
• In May 20‐‐ company completed the filing of record for private equity and investment in real estate with the CIRC
• Till Dec 20‐‐ company had three subsidiaries that engaged in a1, a2 and a3
Source:
LIFE INSURANCE MARKET IN CHINA 2012.PPT 16

17. Despite a large number of institutional restrictions life
insurance market in China is poised to witness rapid growth
Life Insurance Market in China is expected to grow by A% to USD X bn by 20‐‐
Opportunities in the Government
Market Size
Market Initiatives
USD bn
Rise in middle class
population along with
600
400
A%
LE a4 12th five year plan of
the government
P
rise in disposable income a3 focuses on measures
200 a2
provides a major to develop the life
M
a1
opportunity for growth insurance sector
A
0
China Insurance
S
Year 1 Year 2 Year 3 Year 4
Low market penetration Regulatory
level coupled with a Commission has
rising share of ageing also adopted several
population propels the measures to boost
life insurance market in Challenges the market
China
• Location Challenge Life insurance
Entry of firms through • Recession in Developed Markets market in China is
joint ventures and dominated by
• Complex Market Regulations restrictive
mergers is a major driver
of the life insurance • Lack of Human Resource investment
market regulations
LIFE INSURANCE MARKET IN CHINA 2012.PPT 17

18. Thank you for the attention
Life Insurance Market ‐ China report is a part of Netscribes’ Financial Services Industry Series.
For more detailed information or customized research requirements please contact:
Jitendra Punjabi
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E‐Mail: jitendra.punjabi@netscribes.com
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LIFE INSURANCE MARKET IN CHINA 2012.PPT 18