China’s Insurance Industry: Developments and Prospects

Abstract

In 1980, the insurance industry in China was revived after twenty years of stagnation when economic system reform and opening up began in China. During the past two decades, the insurance industry has developed from a virtually nonexistent, minimal, and closed industry to a large, open industry with potential promise. The volume of insurance premiums grew rapidly from RMB 0.46 billion in 1980 to RMB 388 billion in 2003,230 ranking China eleventh in the world with 1.6 percent of the global market share (China Insurance Regulatory Commission (CIRC); Swiss Re 2004, p. 35).231 This fast growing economy coupled with the largest population in the world, rising personal income, and economic system reform could not only explain the rapid growth of China’s insurance industry, but also foretell the increasing importance of China’s insurance market in the future.