More people in the age group of 20-40 years old are willing to buy insurance products due to a lower appetite for risks, indicating business opportunity for life and health insurers, according to a report released by Swiss Re on Tuesday.
The report is based on a survey of 13,800 consumers aged 20 to 40 across cities of 11 Asia Pacific markets in April and May.
“Over the past two years, the 20 to 40 year olds in some main cities of China have become less willing to take risks,” said Swiss Re economist Xing Li at a press event in Beijing on Tuesday.
The Consumer Risk Appetite for Risk index of China is 38.4 in 2011, lower than 43.4 in 2009, and ranked No.8 after markets including Japan and Australia, the report stated. The lower risk appetite reflects higher risk awareness.
Half of the respondents from China gave inadequate government support as the top reason for struggling financially in case of death or long-term serious illness, compared with 36 percent for the Asia Pacific region as a whole.
In China, 72 percent of the respondents planned to buy insurance in the next 12 months, and 43 percent would like to buy products to cover hospitalization expenditure. Products combining investment and life insurance coverage are preferable to 37 percent.
After the high-speed train crash in Zhejiang Province on July 23, people’s willingness to buy insurance products against the unthinkable might further rise, Xing said.
In terms of sales channel, 59 percent of the respondents still prefer insurance agents, but 51 percent said they were willing to buy insurance through banks, the highest in the region, the report noted.
“Potential clients have more trust in banks than traditional agents,” Lu Junting, an agency director at MetLife in China, told the Global Times.
Though insurance agents can provide tailored services, they are not that easily accepted by clients, due to a bad reputation created by a lack of professionalism.
Meanwhile, the regulators have tightened rules for bancassurance – the sale of insurance products at banks – since last year, limiting a bank outlet to sell insurance products for a maximum of three insurers.
Consequently, the share of bancassurance in life insurance premiums fell from 48 percent in 2008 to 42 percent in 2010, Swiss Re’s Xing said.
Life insurance premiums in the first six months of this year reached 561.2 billion yuan ($87.2 billion), up 10 percent year-on-year. Sales by agents accounted for 43 percent in the same period, up 2.7 percentage points over a year earlier and growing faster than bancassurance, according to the China Insurance Regulatory Commission.