China's Insurance Market: Lessons from Taiwan

The countdown to the moment when China's economy surpasses that of the U.S. seems a long way off. China's insurance market is poised to overtake the U.S.'s a lot sooner, possibly as early as 2020. The mainland life market almost doubled in size from 2006 to 2008, to over $80 billion, or roughly one-fifth the size of the U.S. life market. There's no reason to think growth will slow significantly. A look at the insurance industry's experience in Taiwan provides a good way to understand the Chinese insurance customers' buying behavior as the industry matures on the mainland.

Those who have worked in the Chinese insurance industry know all too well that a lot of talent and know-how has been borrowed from Taiwan. Daniel Tsai, chairman of Taiwan's Fubon Financial (2881:TT)—the island's second-largest financial holding company with over $80 billion in assets—says China's industry is modeled after Taiwan's. "If you ask the CIRC [Chinese Insurance Regulatory Commission] they would admit that the whole insurance law in China was borrowed from Taiwan," says Tsai in an interview at Fubon Financial's headquarters in Taipei.