Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
By 2035, almost a third of China’s population will be over the age of 60. A shrinking young workforce poses a policy challenge for the country, particularly for traditional growth engines such as manufacturing. Yet amid these broader concerns, one sector continues to shine: insurance.
The same ageing trend that threatens productivity and strains its social security system is also fuelling demand for insurance products tailored to health and retirement. Unlike sectors tied to volatile trade cycles, life and health insurers are benefiting from long-term demographic tailwinds. China is expected to drive more than a quarter of global premium growth through to 2030, according to Bain estimates.
At the same time, the insurance industry has emerged as one of the earliest and most significant beneficiaries of the artificial intelligence revolution. Insurance is especially well-positioned to leverage advanced data analytics and machine learning to price risk more accurately and deliver personalised coverage. AI-driven insurers are using these technologies to offer tailored solutions by analysing user data such as health metrics and lifestyle habits to dynamically adjust policies and pricing. This digital transformation is already evident in the rapid growth of smaller technology-driven online insurers and brokers in China.
One key example is Yuanbao, which uses more than 4,000 AI models to analyse health and lifestyle data to match users with personalised insurance products. Sales rose about two-thirds last year and its recent US listing, a rare move given delisting pressures and geopolitical tensions, should give it a boost as it seeks to scale further.
Meanwhile, established giants may lag in digital innovation, but they remain some of the safest and most stable names in the sector. China Life, one of the country’s largest, more than doubled its net profit to Rmb106.9bn ($14.7bn) last year, supported by strong premium growth. Its core solvency ratio reached 153 per cent, well above regulatory standards in China. A 40 per cent rise in earnings in the first quarter of this year reflects sustained momentum.
Despite these strengths, the sector is not without challenges. Lower interest rates have squeezed investment yields, undermining a key source of profitability. Meanwhile, traditional agent-based distribution models are under strain from digital disruption, forcing insurers to spend more to generate the same level of new business. Together with rising competition, these challenges have weighed on the sector’s share prices in recent months.
Still, as China’s population ages and its manufacturing engine loses momentum, sectors that can leverage demographic change and digital innovation will stand out as rare bright spots. Insurance is one of the few that sits at that intersection.
june.yoon@ft.com
