China's internet-based insurance sector sees growth

China's internet-based insurance sector demonstrated robust and steady growth, with online insurance purchases increasingly on par with offline channels, according to a report released on Wednesday.

Notably, 84 percent of consumers born after 1995 chose to buy insurance online, surpassing those born after 1985 for the first time, said the report, which was compiled by online insurance distributor Yuanbao Inc and the Research Center for China Insurance and Pension Finance at Tsinghua University's PBC School of Finance.

Data from the Insurance Association of China showed that internet insurance premiums reached 366.3 billion yuan in the first seven months of 2024, marking a 15 percent increase year-on-year.

The proportion of consumers opting for online insurance rose from 73 percent in 2023 to 78 percent in 2024, while the offline purchase rate declined from 85 percent to 79 percent over the same period, according to the report.

The findings from the report also indicated that online insurance penetration is poised to surpass offline within the next two years.

The rapid expansion of online insurance, the report noted, is underpinned by increasingly digital and intelligent consumer behavior.

"Advanced AI technologies are reshaping the insurance experience in unprecedented depth and breadth—enhancing every stage of the process, from information discovery and purchase decision-making to post-sale service and claims management," it said.

Among all consumer segments, those born after 1995 emerged as the most digitally active group, with an 84 percent online insurance participation rate—the highest across all age brackets and the first time they have overtaken the post-1985 cohort, according to the report.

"Growing up in the internet era, the post-1995 generation is more open to new technologies and quicker to embrace digital tools, making them more comfortable with purchasing insurance online and navigating digital platforms," it said.

Mental health concerns are also more prevalent among the post-1995 demographic, with nearly half expressing related anxieties.

According to the report, around 60 percent have purchased accidental injury or critical illness insurance for themselves and their uptake of property insurance, outpatient insurance, and pet insurance is also significantly higher than the general population.

In response to the changes in the development trend of future Internet insurance, Zhu Junsheng, a former research director of the Research Center for China Insurance and Pension Finance at Tsinghua University's PBC School of Finance, said that the evolution of internet insurance lies in a shift from simply holding a policy to seeking optimized protection.

"This rational decision-making is driven by a deeper understanding of risk and a growing demand for proactive security," he said.

Zhu added that this transformation reflects a shift from basic coverage to comprehensive protection plans, from single-policy purchases to integrated solutions, and from traditional products to an "insurance + services" ecosystem.

Zhou Yanli, a former vice-chairman of the former China Insurance Regulatory Commission, said that the connotation of internet insurance will continue to expand in the future.

"With the accelerated development of technologies such as artificial intelligence, blockchain, and cloud computing, insurance services are expected to become more intelligent, inclusive, and trustworthy," Zhou said.