Financial Services Association, April 23 (Reporter Wang Hong) In the future, premiums on various online channels will increase markedly. Online channels may overtake offline channels. After a sample survey of more than 3,000 household financial management and insurance product decision makers, the “2023 China Internet Insurance Consumer Insight Report” (hereinafter referred to as the “Report”) published by the China Insurance and Pension Research Center of Tsinghua Wudaokou University of Finance analyzed this trend. Industry experts also pointed out that with the formation of consumer habits and the application of cutting-edge technology, China's Internet insurance will continue to grow rapidly.

The report sees huge potential for insurance consumption in a sinking market. Insurance consumption is expected to recover further, and insurance buyers will gradually expand to well-off income and people in third-tier cities. In terms of insurance budgets, the higher the income, the higher the premium budget. Over 60% of consumers have an annual premium budget of 8,000 yuan or more. Zhou Yanli, former vice chairman of the Insurance Regulatory Commission, suggested that Internet insurance increase product and service innovation, actively explore the application of new technologies, and carefully address various risks and challenges.

Online channels for buying insurance may overtake offline channels

The report points out that at present, traditional insurance and offline outlets/agent channels are still the first choice for insurance purchases. It is expected that online channels will grow significantly in the future, and online channels may overtake offline channels.

According to sample survey data, 70% of respondents said that traditional insurance offline outlets/agent channels are currently the first choice for insurance purchases. However, compared to 2022, online insurance rates for consumers of all ages generally increased in 2023, and offline insurance rates decreased. Consumers have higher incomes, higher education, and higher city levels, and are more inclined to buy insurance through online channels. In addition, the seniors' preference for online services increased significantly. The online insurance rate of respondents aged 51 to 60 increased from 63% in 2022 to 72% in 2023.

From 2013 to 2022, the premium scale of Internet insurance in China increased from 29 billion yuan to 478.25 billion yuan, accounting for 10% of the industry's original premium income, with a compound annual growth rate of 32.3%. “With the formation of consumers' online spending habits and increasing awareness of independent insurance purchases, and the development of cutting-edge technology applications in the insurance industry, China's Internet insurance will continue to grow rapidly,” Xu Jinghui, former chairman of Taibao Life Insurance, said.

Notably, consumers also have concerns about how to buy insurance online. “Worrying about potential information security risks in online purchases,” “worrying about insufficient notification of insurance applications,” and “worrying about not being able to find anyone or making a claim” are all pain points of online insurance. The report predicts that about 8% of consumers who have purchased insurance online may be “lost” in the future.

“Safeguarding customer data security and privacy, and preventing data leakage and misuse are important issues in the digital age. “A series of regulations on the protection of financial consumer rights introduced by the financial supervisory authorities provide a guarantee for the healthy and orderly development of the digital transformation of the Internet insurance industry,” Xu Jinghui said in response to these concerns.

Xu Jinghui also suggested that in the face of the consumer trust crisis, Internet insurance institutions should continuously optimize service processes, strengthen data security protection and privacy management, and at the same time pay close attention to changes in regulatory policies and maintain compliance operations. Thanks to regulation and the joint efforts of the industry, the Internet insurance industry will be able to achieve high growth and high-quality “double high” development.

Insurance consumption will further recover, and the higher the income, the higher the premium budget

According to the report data, half of consumer households spent more than 8,000 yuan on annual premiums in 2023, and the share of all income groups in “high premiums” increased in 2022. In the future, insurance consumption will recover further. Over 60% of consumers have a premium budget of 8,000 yuan or more. The higher the income, the higher the premium budget. Among them, over 40% of high-income people have a household premium budget of 20,000 yuan or more in the next year.

“In this survey, over 60% of consumers have an annual household premium budget of 8,000 yuan or more in the next year, which is higher than the previous year's budget. “Insurance buyers are also gradually expanding to well-off income and people in third-tier cities, and the market potential is huge,” said Wei Chenyang, vice dean of the Institute of Fintech Research at Tsinghua University. As investor confidence recovers, residents' preventative savings may gradually be released, and safe-haven assets such as personal insurance are expected to continue to pick up. Savings insurance as a means of long-term wealth management also has a lot of room for growth.

Wei Chenyang pointed out that in terms of technical conditions, with breakthroughs and applications of artificial intelligence technology such as big models, insurance is expected to become simpler, more personalized, and more intelligent. This will greatly increase the public's acceptance of insurance, thereby increasing the popularity of insurance.

“As the degree of aging deepens, commercial pension insurance and commercial health insurance will become important supports in the national social security system, and the health care ecosystem is expected to usher in market opportunities,” Wei Chenyang believes. Chen Donghui, the former president of Swiss Re China, also said that for the mature insurance market, China's insurance still has a lot of rich room in terms of product systems, product types (such as increasing variable products, long-term care insurance, disability insurance, etc.), and product forms (such as increasing allowances for health insurance products and adding more segmented services for customers to freely choose).

Zhou Yanli provided suggestions for the development of Internet insurance: Internet insurance should first increase product and service innovation, accurately sense and analyze the diverse needs of different customer groups; actively explore innovative applications of new technologies such as big models to accelerate the digital and intelligent development of the insurance industry; actively apply insurance technology to bring customers a better and more convenient online claims experience; carefully address various risks and challenges, and explore effective solutions for data security and network security under market economy conditions.