First, let us have a look at population, age structure and income situation in China (Fig.1).
Although the population of China remains increasing, it is still kept under 1.4 billion with its growth rate around 0.5%. Next, age structure is pictured below (Fig.2).
Explicitly, the age structure remains extremely steady. In recent years, the population under age 14 decreased, while the population over age 65 increased, which makes a sustainable supply of labor force a problem for China in the future.
In addition, per capita disposable income is introduced here (Fig.3).
As we can see, per capita disposable income keeps increasing from 2007 to 2014, which potentially means the ability of purchase correspondingly increases.
The average growth rate is around 16%. Given the growth rate, per capital dis- posable income could reach 70,275 in 2020.
As for social security system, China has basically formed its social security system through tremendous reformation over the last 30 years. On the one hand, in urban cities, social security system is composed of endowment insurance, medical
129000 130000 131000 132000 133000 134000 135000 136000 137000 138000
2007 2008 2009 2010 2011 2012 2013 2014
Unit10,000
Year
Fig. 1 Population of China (2007–2014).SourceOfficial website of National Bureau of Statistics of the People’s Republic of China:http://www.stats.gov.cn/
insurance, unemployment insurance, employment injury insurance, and maternity insurance. In addition, the social security system has successfully guaranteed the lowest allowance for people in those areas. On the other hand, in rural areas, China keeps on trying to fulfill a basic allowance system and accelerate reforming the health care system.
The following Table1illustrates that the participants of social security system steadily increases in China (Fig.4).
Overall, the number of participants has increased from 2009 to 2014. Comparing the situation among thesefive insurances, medical insurance shows the most rapid increase. From absolute number of participants, medical insurance also ranks the first and maternity insurance the last in terms of number of participants.
Social security system plays an important role in the Chinese society. Premium collected by the system is managed by separate funds of different social insurance.
The followingfigures show the trend of the fund value of different kind of social insurance in China (Figs.5and 6).
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
2007 2008 2009 2010 2011 2012 2013 2014
>= 65 15-64 0-14
Fig. 2 Age structure. SourceOfficial website of National Bureau of Statistics of the People’s Republic of China:http://www.stats.gov.cn/
0 5000 10000 15000 20000 25000 30000 35000
2007 2008 2009 2010 2011 2012 2013 2014
Income
Year
Fig. 3 Per capita disposable income.SourceOfficial website of National Bureau of Statistics of the People’s Republic of China:http://www.stats.gov.cn/
As we can see, from 2009 to 2014, the fund net worth keeps positive, which means fund of these five insurances remain relatively maintainable. From the perspective of absolute number, fund of endowment insurance has the largest surplus and maternity insurance owns the least net worth.
Table 1 Participants of social security system (2009–2014) (Unit 10,000)
2009 2010 2011 2012 2013 2014
Medical insurance 40,147 44652.5 47343.2 53641.3 57072.6 59746.9 Endowment
insurance
23549.9 25707.3 28391.3 30426.8 32218.4 34124.4 Unemployment
insurance
12715.5 13375.6 14317.2 15224.7 16416.8 17042.6 Employment injury
insurance
14895.5 16160.7 17695.9 19010.1 19917.2 20639.2 Maternity insurance 10875.7 12335.9 13892 15428.7 16392 17038.7 Referred fromhttp://data.stats.gov.cn/
0 10000 20000 30000 40000 50000 60000 70000
2009 2010 2011 2012 2013 2014
Numer(10,000)
Year
Medical Insurance
Endowment Insurance
Unemployment Insurance Employement Injury Insurance Maternity Insurance
Fig. 4 Participants of social security system. Source Official website of National Bureau of Statistics of the People’s Republic of China:http://www.stats.gov.cn/
0 5000 10000 15000 20000 25000 30000 35000
2009 2010 2011 2012 2013 2014
Net Worth (100,000,000)
Year
Medical Insurance
Endowment Insurance
Unemployment Insurance
Fig. 5 Fund net worth.SourceOfficial website of National Bureau of Statistics of the People’s Republic of China:http://www.stats.gov.cn/
In final part, basic situation of security and insurance industries are further introduced (Fig.7).
As is shown above, although security capitalization seems a little bit volatile, the absolute quantity shows a tendency to increase. From less than 5 trillion in 2005, the security capitalization has grown up to nearly 40 trillion in 2014, almost 8 times the quantity in 2005 in the past 10 years. Therefore, the development of security market in China is still prospective in next few years (Fig.8).
Different from security capitalization, insurance premium keeps on increasing for the past 10 years. Premium in 2014 is almost 4 times that in 2005 (Fig.9).
The number of insurance organizations has almost doubled in the past ten years.
Its continuous increase shows that more and more investors are interested in the insurance industry (Fig.10).
0 200 400 600 800 1000 1200
2009 2010 2011 2012 2013 2014
NetWorth (100,000,000)
Year
Employement Injury Insurance Maternity Insurance
Fig. 6 Found net worth.SourceOfficial website of National Bureau of Statistics of the People’s Republic of China:http://www.stats.gov.cn/
0 50000 100000 150000 200000 250000 300000 350000 400000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Fig. 7 Security capitalization (100,000,000). Source From official website of China Security Regulatory Commissionhttp://www.csrc.gov.cn/pub/newsite/sjtj/
0 5000 10000 15000 20000 25000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Fig. 8 Insurance Premium (100,000,000). Source From official website of China Insurance Regulatory Commissionhttp://www.circ.gov.cn/web/site0/tab5179/
0 20 40 60 80 100 120 140 160 180 200
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Year
Fig. 9 Number of insurance companies and organizations.SourceFrom official website of China Insurance Regulatory Commissionhttp://www.circ.gov.cn/web/site0/tab5179/
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Non-life insurance Life insurance
Fig. 10 Percentage of life and non-life insurance premium.SourceFrom official website of China Insurance Regulatory Commissionhttp://www.circ.gov.cn/web/site0/tab5179/
The percentage of non-life insurance increases from 25 to 38% in past ten years, probably due to the development of obligatory car insurance, the increasing awareness of insurance, and the development of Chinese economy, among many other factors.