China's Life Insurance Market Set for Rapid Growth Driven by Bancassurance and Demographics

The Chinese life insurance market is poised for significant growth over the next five years, with projections indicating a market value surpassing $925 billion by 2030. Key drivers include enhanced bancassurance partnerships, digitization, and product innovation responding to evolving demographic and regulatory trends. Bancassurance is expected to play a dominant role, accounting for approximately 60 percent of new premiums in the first half of 2025. This growth follows regulatory changes that lifted caps on bank commission sharing in May 2024, facilitating expanded distribution channels. Digital advancements, including AI adoption, are also improving underwriting, risk management, and customer engagement. Demographic shifts, particularly China's aging population, underpin increasing demand for life insurance products. By 2025, individuals aged 60 and over are projected to constitute 22 percent of the population, with those over 65 comprising about 15 percent. This trend fuels demand for whole life insurance, anticipated to represent 81 percent of life insurance premiums in 2025. Additionally, high net worth individuals are leveraging life insurance for estate and succession planning, while the government's 15th Five-Year Plan (2026-2030) aims to expand long-term care insurance, enhance rural pensions, and adjust retirement age upward, further supporting market growth. Regulatory adjustments are influencing product strategies, notably with a benchmark interest rate reduction to 1.99 percent for ordinary life products effective August 2025. Insurers are revising portfolios and launching new products to align with pricing guidance. The introduction of new frameworks such as NFRA with standardized licensing and commission revisions also provides structural stability. Short-term fluctuations in new business may occur due to interest rate adjustments; however, the overall market outlook remains positive. The convergence of regulatory, demographic, and technological factors positions China's life insurance sector for sustained expansion and innovation in the medium to long term.