(Yicai) Feb. 6 -- The Chinese insurance sector's revenue from insurance premiums jumped 5.7 percent last year, mainly thanks to strong savings demand.

The primary insurance premium income in China's insurance industry reached CNY5.7 trillion (USD782.5 billion) in 2024, according to data released by the National Financial Regulatory Administration on Feb. 2.

China's revenue from life insurance premiums rose 15.4 percent to CNY3.2 trillion last year from 2023, according to data from brokerage giant Guotai Junan.

The growth in income from insurance premiums in China was mainly thanks to the strong demand for savings, which drove the life insurance business, industry insiders told Yicai. In the low-interest-rate environment, demand for insurance savings and the switch of life insurance interest rates are the main factors driving the growth of life insurance premiums over the past two years, they added.

In 2023, the premiums of some traditional life insurance products increased significantly in the two months before the interest rate switch, when life insurance companies stopped selling products with a predetermined interest rate of 3.5 percent and lowered that for ordinary life insurance to less than 3 percent. Last year, the interest rate cap was lowered again to 2.5 percent.

Health insurance premiums climbed 8.2 percent last year from the year before, according to data from Soochow Securities. Such premiums jumped between 5.7 percent and 12.2 percent each quarter last year, with the highest increase in the third one.

Chinese property insurance companies' primary insurance premium income rose 5.6 percent to CNY1.69 trillion. Such revenue from motor insurance jumped 5.4 percent to CNY913.7 billion (USD125.4 billion) and from non-motor insurance 8 percent to CNY777 billion.

According to data regarding compensation claims over the past four years, the increase in claim expenses in 2021, 2023, and 2024 significantly exceeded the rise in premium income. Last year, the jump in property insurance claims was 7 percent and in life insurance business claims was 36 percent.

The growth rate of compensation expenses is higher than the growth rate of premium income mainly because the losses caused by natural disasters have increased over the past two years from the previous two, the product structure of life insurance companies has changed, with some health insurance products having higher loss ratios, and the increase in medical detection rate and expenses has led to more claims for critical illness insurance and other similar products, an insurer noted.

The insurance industry will usher in a broader space for development this year, several industry analysts pointed out, with some expressing their expectations for insurance dividends while expecting the value of the new life insurance business to keep a double-digit growth on a high base this year.

In addition, Huachuang Securities and Soochow Securities have said that new energy vehicle insurance is expected to contribute more in the future.

Editor: Martin Kadiev