What Is the Insurance Industry?

The insurance industry refers to an industry where funds collected through contractual forms are used to compensate the insured's economic interests.

Insurance

Since the reform and opening up, the development of China's insurance market has made remarkable achievements. In 1980, the domestic insurance business resumed, and the country's premium income was only 460 million yuan. In 2000, the country's premium income reached 159.6 billion yuan, an average annual growth rate of 34%, but there are still many problems in the development process. Judging from the current situation of the world's insurance industry, the level of development of China's insurance industry is still quite low. In 1999, China's per capita premium (insurance density) was only 110.58 yuan (approximately 11.4 US dollars), which is far from Switzerland's 4654.3 US dollars, the US's 2722.7 US dollars, and Hong Kong's 1072.8 US dollars, ranking 78th in the world; premiums The proportion of income in GDP (depth of insurance) is only 1.49%, ranking 66th in the world, while in developed countries it is generally about 10%. From the perspective of the development of the domestic insurance market, there are still relatively few competing entities and a high degree of monopoly; the development of the intermediary market and the reinsurance market is lagging behind; the single insurance product, the service methods and means are backward; the insurance company has insufficient capital and low asset quality. ^[1]

China Insurance Regulatory Commission ^[1]

The organizational form of the insurance industry can be divided into the following four types according to its operating entities: ^[1]

Although China's economy has entered a new normal and development in various fields is facing growth shifts, structural adjustment pains, and early stimulus policies digesting the "three-phase superposition", China's insurance industry fully respects the laws of the market and continuously reforms and innovates during development. Based on a breakthrough of 10 trillion yuan last year, it reached 11.6 trillion yuan at the end of the third quarter of this year, an increase of 14% from the beginning of the year, and achieved encouraging results. At the same time, China's insurance industry, while seizing the opportunities of the Internet, accelerates supply-side reforms with format innovation, promotes traditional insurance companies to continuously update their development concepts, innovate development models, and foster new business growth points; on the other hand, they are committed to modernizing risk supervision and reimbursing for second-generation implementation. Steady steps have provided emerging market experience for the development of global insurance regulatory rules, and made positive contributions to the development of international regulatory rules and reform and development. ^[3]

Development Status and Trend of World Insurance Industry

(I) Development Status of the World Insurance Industry

(1) Premium income.

According to statistics from Swiss Re's Sigma Magazine, Issue 3, 2004, worldwide premium income in 2003 was $ 2,940.67 billion. Among them, the industrialized countries accounted for 89.32% of the world's market share, of which the United States accounted for 35.89%, Japan accounted for 16.28%, and emerging market countries and regions accounted for 10.68%. China ranks 11th among 88 countries and regions, accounting for 1.6%. The highest premium income in 2002 was the United States, which was 1,055.498 billion U.S. dollars, followed by Japan, which was 478.865 billion U.S. dollars, followed by the United Kingdom (246.733 billion U.S. dollars), Germany (107.811 billion U.S. dollars), France (163.679 billion U.S. dollars), and Italy ( 111.761 billion dollars), South Korea (59.758 billion dollars), Canada (59.144 billion dollars), the Netherlands (50.266 billion dollars) and Spain (47.014 billion dollars).

(2) Insurance depth.

The depth of insurance is the proportion of premium income in GDP. It reflects the status of a country's insurance industry in the entire national economy. Its calculation formula is:

In 2003, the global average insurance depth was 8.06%. The top 10 countries or regions in the world are: South Africa (15.88%), United Kingdom (13.37%), Switzerland (12.74%), Japan (10.81%), Belgium ( 11.61%), Taiwan, China (11.31%), Barbados (11.29%), Netherlands (9.77%), South Korea (9.63%), and the United States (9.61%). China ranks 44th out of 88 countries and territories with a depth of insurance of 3.33%.

(3) Insurance density.

Insurance density refers to the average premium amount calculated based on the national population. It reflects the average degree of insurance protection for a country's nationals. Its calculation formula is:

According to statistics from Swiss Re's Sigma magazine, No. 8 of 2004, based on the comparison of insurance density in 2003, Switzerland topped the list with insurance density of $ 5660.3, followed by the United Kingdom with insurance density of $ 4058.5. The global insurance density in 2003 was US $ 469.6, of which US $ 2763.5 for industrialized countries and US $ 58.7 for emerging markets. Most industrialized countries average between $ 1,100 and $ 3,700, while developing countries have lower averages. China's insurance density has grown rapidly, but the level is still low, ranking 71st at $ 36.3.

(II) Development Trends of the World Insurance Industry

(1) Liberalization of the insurance market

1. Deregulate rate controls and make rate a marketing strategy.

2. Liberalization of insurance services.

3 Relax restrictions on the establishment of insurance companies.

(2) Internationalization of insurance business

(3) Professionalization of employees

(4) Modernization of insurance management

(5) Broadening of exhibition industry

(6) Diversified organizational forms

(7) Scale of insurance business

Xiang Junbo: The next 10 to 20 years will still be a golden period for the development of the insurance industry

Xiang Junbo, chairman of the China Insurance Regulatory Commission, said in a discussion with insurance companies, the China Insurance Regulatory Bureau, experts and scholars, the news media and other parties that the next 10 to 20 years will still be a golden period for the development of the insurance industry.

Xiang Junbo pointed out at the meeting that the Third Plenary Session of the 18th CPC Central Committee will make overall arrangements for China's comprehensive deepening reform in the future. The Central Economic Work Conference and Urbanization Work Conference clarified the general tone of economic work next year. The key issues of the insurance industry, such as insurance, agricultural insurance, endowment insurance, and critical illness insurance, have set clear requirements, and have released huge dividends for the functioning of insurance, which will definitely profoundly affect the insurance industry. In 2014, the China Insurance Regulatory Commission will firmly grasp the general tone of "striving for progress in stability, reform and innovation," and adhere to the twelve-character policy of "grasp service, strict supervision, risk prevention, and development." Do a good job in the basic work of talents, technology, data and management of the insurance industry, and promote the healthy and sustainable development of the insurance industry. ^[4]