What Makes China the Fastest Growing Market for Insurance Companies Beijing marks the highest proportion of leasing expansions

By Komal Nathani

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.

Pixabay

China, India and Southeast Asia record the fastest growth for insurance companies in the Asia-Pacific market, says CBRE Asia-Pacific report launched this month. It says that in past two years, insurance firms have been active in leasing office spaces for business expansion, and have also engaged in relocation for cost saving. The total leasing volume by insurance companies increased by 36 percent of y-o-y growth in 2018, with the bulk of leasing transactions completed in H1 2018.

The increasing per capita income from expanding middle class has heightened the demand for both traditional and universal life insurance, as per the report. This is also contributing to economic growth in Asia.

Why China

In terms of leasing purpose, Beijing marks the highest proportion of leasing expansions. Most of the insurance companies want to relocate themselves in central business district CBD and at Financial Street. And the real estate industry is also keeping a tab on the emerging trends and demand from the business community to make the most of opportunities.

According to report, the reason why Chinese market is taking off in the insurance industry, it's because of digital innovation and the entry of new players in the insure tech segment. With nearly 725 million mobile internet users, a measured regulatory approach that supports innovation and the continuous development of new, disruptive services by digital giants Alibaba, Baidu, and Tencent, insure tech has become a new fad in China for investors and entrepreneurs both.

Other SEA Countries

While China, India and Singapore are picking up the growth in insurance premiums, countries like Indonesia and Philippines record the relatively lower growth. As the risk of natural disasters becomes a major deterrent in the growth of the sector, such as earthquakes in Indonesia and typhoons and flooding in the Philippines, insurance industry seems to be troubled in these regions of Asia.

What are the other factors that deter the growth? There are key real estate-related challenges for insurance companies in Asia-Pacific, which range from new lease accounting standards to purchasing office properties in emerging Southeast Asia. Opportunities include the growth of flexible space and brighter prospects in China as the insurance sector opens up to foreign investment.

Among other challenges in the sector, company owners face a major challenge which is to establish offices in Southeast Asian markets without property ownership restrictions.

However, report claims that despite steady growth in online insurance platforms, the agency model remains the main conduit for life insurance sales. Insurance companies must therefore build and maintain highly efficient real estate portfolios capable of supporting continued expansion.


Komal Nathani

Former Correspondent, Entrepreneur Asia Pacific

A firm believer of hard work and patience. Love to cover stories that hold a potential to change the momentum of business world. Currently, a part of all-women web team of Entrepreneur’s Asia Pacific edition to jig the wheel of business journalism!

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Business News

This Apple Offering Is Causing the Company to Lose Over $1 Billion a Year

Apple can afford the loss — the company's Services division brought in $26.3 billion overall for Apple for the three months ending in January.

Business News

'Should Not Travel to the Airport Under Any Circumstances': Fire Closes Heathrow Airport Causing Travel Chaos Globally

Travelers should avoid Heathrow Airport on Friday — and disruptions could last for days.

Business Solutions

Beyond Passwords: Comprehensive PDF Security for Your Business Docs

With a PDF Reader Pro lifetime license you can encrypt, redact, and password-protect sensitive documents.

Business News

'A Die-Hard Fan My Entire Life': Boston Celtics Sell to Superfan for Over $6 Billion, the Highest Price Ever for a Pro Sports Team

If the Celtics sale goes through, the deal could net the sellers a hefty return on investment.