(Yicai) July 7 -- China's insurance market is expected to be the world's fastest growing over the next 10 years, expanding at an average annual rate of 7.3 percent, according to a report released yesterday by German financial services firm Allianz Group’s China insurance holding company.

And the country’s life insurance market is expected to grow even faster, at an average annual rate of 7.6 percent, according to the Allianz (China) Insurance Holding report.

Global insurance premiums jumped 7.1 percent last year from the year before to EUR6.9 trillion (USD7.9 trillion), the report said. China’s insurance market expanded by a steady 7.4 percent, with total premium income reaching EUR745.6 billion (USD852.41 billion), cementing its position as the world’s second-largest insurance market.

China’s life insurance sector outperformed the broader Asian market in 2025. Life insurance premiums across Asia rose 9.9 percent last year, while China’s life insurance market soared 11.4 percent, placing it firmly in the lead.

Industry insiders said the growth has been driven by rising demand for retirement protection as the population ages, growing awareness of supplementary pension insurance and steady household wealth growth that has boosted demand for more diversified financial planning.

“We believe demand in China’s life insurance market remains strong,” said Sun Ting, chief strategy officer and chief analyst of non-banking finance at Soochow Securities. “The lowering of guaranteed interest rates and the shift toward participating insurance products will help drive a continued optimization of insurers’ liability costs and ease pressure from negative investment spreads.”

China’s life insurance penetration rate, measured as premium income as a share of gross domestic product, is 2.5 percent, approaching North America’s 2.8 percent and suggesting that the Chinese life insurance market is becoming more mature, the report said. As China’s pension system continues to evolve in response to rapid demographic changes, life insurance is expected to play an increasingly important role as a key source of supplementary retirement protection.

Editor: Kim Taylor