Chinese consumers are increasing their annual spending on insurance premiums, with the country’s rising household wealth and aging population among the main growth drivers, a new report has found.

Half of Chinese households spent more than 8,000 yuan ($1,100) on insurance premiums in 2023, according to the study, which was published Tuesday.

Jointly produced by a research center at Tsinghua University’s PBC School of Finance and Yuanbao Insurance Broker, a Beijing-based online insurance platform, the report found that China’s wealthier families tended to spend more on insurance. Over 40% of high-income households said they planned to spend more than 20,000 yuan on insurance in the next year.

The increasing demand for insurance is mainly a result of China’s economic growth, with families wanting to protect their growing assets, as well as the country’s rapidly aging population, which is pushing up demand for private pensions and medical insurance, said Wei Chenyang, director of the China Insurance and Pension Research Center at Tsinghua University’s PBC School of Finance.

The total value of China’s primary insurance premiums reached 5.12 trillion yuan in 2023, a year-over-year increase of 9.14%, according to data from the National Financial Regulatory Administration.

One of the fastest-growing market segments is online insurance, with consumers in all age groups becoming more likely to buy insurance online in 2023, the report found. Consumers with high incomes, high education levels, and homes in large cities were the most likely to purchase insurance online.

This trend is likely to continue, with 82% of respondents saying that they planned to purchase insurance online in the future, compared with 76% who said they intended to make purchases via offline channels.

The most popular insurance product in China last year was critical illness insurance, held by 60% of respondents. Commercial medical insurance and basic health insurance policies were also among the most common product classes, held by 44% and 30% of respondents, respectively.

With rapid population aging putting pressure on China’s social security system, consumers are increasingly looking to take out commercial pensions and long-term care insurance. The report found that high-income middle-aged consumers were the most likely to invest in commercial pensions, but people in their 20s were the most likely to say they intended to take out a policy in the next one to two years.

Changes in people’s family structures and lifestyles are also raising demand for previously niche products such as property insurance and pet insurance. According to the report, 27% of Chinese pet owners — mostly younger, female consumers — currently have pet insurance, and another 35% said they planned to take out a policy.

Chen Yimin, a 33-year-old Shanghai resident, told Sixth Tone she had taken out a range of insurance policies for her family, including transportation accident insurance, comprehensive accident insurance for the elderly, and home insurance. She had bought most of these products online, as online insurers offered greater convenience, a larger variety of policies, and more flexible payment options, she said.

Last year, Chen also took out pet insurance after her 1-year-old dog was diagnosed with enteritis and required treatment that cost her 800 yuan. Chen currently pays an annual premium of 600 yuan per year for pet insurance.

“Even if it’s only basic coverage, it gives me peace of mind,” Chen said. “Since purchasing it, my dog has not been sick, which is great.”

(Header image: VCG)