ICS Occasional Papers

Insurance is a very important financial services industry and is a pillar or support system for the entire economy of a country, it is important to study the insurance industries of the countries to get a fair idea about how the assets of a country is protected. Insurance is an important financial product and is designed to take care of the interests of the insured in case a loss happens. The loss can be of life, health as well as assets. There are broadly two branches of insurance – Life and Non-Life. While the life insurance is to take care of the needs of individuals and families in case of decease of their near and dear ones, the non-Life or general insurance products are to indemnify the financial loss to the assets due to an accidental loss. Worldwide, insurance forms the backbone of the financial sector and the economy. The insurance companies are cash rich ones and they hold the funds for investment in the various sectors of the economy. Conventionally, the insurance companies play a big role in the economic development of the nations. The insurance penetration of a country which is the premium underwritten as percentage of GDP is a measure of the maturity of insurance markets across the world. The insurance penetration in developed markets is higher than developing markets. However, the Chinese market is fast catching up with global trends and Indian market which is comparatively in a much nascent state of development is also making rapid strides. This paper is intended to study the Chinese insurance market scenario – the history of the Chinese insurance industry, the size of the insurance companies, the insurance penetration levels, the major players in both Life and Non-Life (General) Insurance, the broad regulatory environment and also make a comparison with the Indian insurance market on these broad parameters. The paper may also look at the common challenges, the possible synergies, collaboration and points of convergence that may benefit the insurance industry of both the countries. This study may be beneficial to understand and assess the broad contours of the insurance industry in China and India from a comparative and analytical perspective. The paper is based on study of industry statistics and reports by regulatory agencies, studies by leading international insurance bodies, insurance journals, etc.