IT growth trends in the Chinese insurance market

Small and midsize insurance firms in China, which include jointly funded and foreign-funded companies, have faster growth rates than their larger counterparts, and their investment ratio for IT is also higher. According to Wenli Yuan , a senior analyst at technology consultancy firm, Celent, these companies generally do not have the burden of having to make serious reforms to the old systems. From their incorporation, they operate on an open platform, with data that is consolidated at the headquarters. Some of these companies also adopt centralized operations. From this perspective, small and midsize insurance companies find it easier to accept new technology. This, argues Ms Yuan, is their late development advantage

The Chinese economy has been growing very rapidly in recent years, with GDP growth hovering around 10%. Both domestic and foreign players in the insurance industry are very excited that insurance industry growth has far surpassed the GDP growth. Insurance premiums increased from less than ¥140bn in 1999 to ¥564.1bn (equivalent to US$73.7bn) in 2006, with a compound annual growth rate (CAGR) reaching 22.1%.