{"id":45344,"date":"2019-11-15T20:01:45","date_gmt":"2019-11-15T12:01:45","guid":{"rendered":"https:\/\/daxueconsulting.com\/?p=45344"},"modified":"2022-11-16T19:17:12","modified_gmt":"2022-11-16T11:17:12","slug":"travel-insurance-market-in-china","status":"publish","type":"post","link":"https:\/\/daxueconsulting.com\/travel-insurance-market-in-china\/","title":{"rendered":"The travel insurance market in China: Strong demands from the growing tourism industry"},"content":{"rendered":"\n

As a key part of the non-life\ninsurance market<\/a>, China is one of the largest\ntourism markets for both domestic and overseas tourists. In 2018, Chinese\ntourists made about 150 million<\/a>\ntrips overseas, and there were 55 billion<\/a>\ntrips within China. The drivers of the travel insurance market in China include\nhigher disposable incomes, simplified passport and visa application procedures,\npolicy support and the popularity of mobile Internet. In order to prepare for\nrisks and escort the development of the tourism industry, travel insurance in\nChina is increasingly popular. <\/p>\n\n\n\n

\"number<\/figure>\n\n\n\n

[Source:\nDaxue consulting \u201cNumber of outbound trips from China\u201d]<\/p>\n\n\n\n

Most tourists travelling overseas buy travel insurance\nsince they face a number of potential risks, especially when they are not\nfamiliar with the local culture and language. In the event of an accident,\nillness or unanticipated incidents, it can be difficult to find assistance or\nseek compensation. Tourists travelling within China face similar issues. However,\nmany Chinese consumers have a sense of security about domestic tourism, they\nshow less demand for travel insurance during domestic travel. Insurance\ncompanies need more publicity for travel insurance to enhance the safety\nawareness of Chinese tourists.<\/p>\n\n\n\n

What does travel insurance in China include?<\/h2>\n\n\n\n

The main risks Chinese tourists face are personal\ninjury, loss of property, flight delays, flight cancellations, lost baggage, hotel\norders canceled, traffic accidents and disasters. Therefore, the travel\ninsurance market in China has a large variety of products covering a variety of\nservices including destinations, travel agencies, guides, tickets,\ntransportation, hotels, etc. Among those risks, flight delays, disasters, lost\nbaggage and property are the most frequent, the insurance target those risks\nare favored broadly by tourists. In the first half year of 2019, more than 40%<\/a>\nof the claims of travel insurance in China were related to flight delays, since\nmany airlines do not compensate for delays and cancellations if they are caused\nby external reasons like weather. Other than flight delays insurance, property\nloss (stolen or robbed) insurance is also necessary, especially for the Chinese\ntourists in Europe. In 2019, among all travel insurance claims related to the property\nloss (stolen or robbed) of Chinese tourists, about 20%<\/a>\nhappened in Europe<\/a>.\n<\/p>\n\n\n\n

What are the factors that influence sales of travel insurance\nin China?<\/h2>\n\n\n\n

The premiums and sales of travel insurance are highly\naffected by tourism season and holidays in China. Travel insurance usually\nenter the selling season during the New Year’s Day, the Spring Festival, May\nDay, National Holiday, winter and summer vacation. Secondly, the transportation\ntools used by travellers also have an impact on the sales of travel insurance. Tourists\nwho travel by airplanes, bus and private cars are more willing to have travel insurance\nthan people use other transportation methods. Policy and regulations about\ntourism are important factors. For example, every tourist must have insurance\nwhen they submitting application materials of short-term visa for the Schengen\nregion. Travel insurance is also compulsory for traveling to Taiwan. Destination\ndistance is also a key factor for consumers. Tourists who choose long-distance tourism\noften show stronger demands for travel insurance, and the security condition of\ndestinations is significant factors as well. Most Chinese people are easily convinced\nof the need to purchase travel insurance after hearing of other tourists who\nhad accidents while traveling in those regions.<\/p>\n\n\n\n

Where do consumers buy travel insurance in China?<\/h2>\n\n\n\n

Travel agencies and insurance companies are traditional purchase channels for tourists, however, most consumers become habituated <\/a>to use mobile apps and online tourism platforms (such as Ctrip \u643a\u7a0b) to obtain information and buy travel insurance. On those platforms, travel insurance is treated as the value-added service of tourism and tickets, which largely simplified the purchase process of those insurance products. <\/p>\n\n\n\n

\"Ctrip.com<\/figure>\n\n\n\n

[Source: vacations.ctrip.com\n\u201cthe travel insurance products for Chinese tourists\u201d]<\/p>\n\n\n\n

In addition, a considerable number of insurance\ncompanies have been trying to sell travel insurance through WeChat public\naccounts and\nmini-program<\/a>s<\/a>.\nHowever, some of Chinese tourists prefer to travel independently and they show\nless trust in travel insurance purchased online. Insurance companies need to develop\nmore distribution channels for travel insurance in order to reach the diverse\nChinese consumer base. <\/p>\n\n\n\n

Leading players in the travel insurance market in China<\/h2>\n\n\n\n

PINGAN (\u4e2d\u56fd\u5e73\u5b89) presence in China<\/h3>\n\n\n\n
\"\"<\/figure>\n\n\n\n

[Source: baoxian.pingan.com\n\u201cdomestic and overseas travel insurance\nfor the Chinese tourists\u201d]<\/p>\n\n\n\n

PINGAN <\/a>is one of the largest domestic insurance companies in China. The travel insurance of PINGAN is divided into domestic and overseas tourism and includes both group travel and independent tourism. PINGAN\u2019s domestic travel insurance mainly covers the risks of disasters, high-stakes sports, accidental injuries\/death, medical treatment, property and luggage loss, the insurance also offers emergency rescue services and reasonable expenses for emergency situations (such as funeral and family visits). For the overseas travel insurance of PINGAN, it focuses on trip cancellation\/delays, visa refusing and tickets loss other than personal injuries and property loss. PINGAN offers travel insurance targets on road trips, plateau areas and different regions, such as Europe, North America and Australia. <\/p>\n\n\n\n

In order to offer better after-sales service, PINGAN developed\nonline channels to provide quick claim settlement. The company encourages\nconsumers to use simple three steps on PINGAN mobile app and WeChat account (scanning\nQR code) to get compensation in a very short time after they had accidents or disease.<\/p>\n\n\n\n

Allianz (\u5b89\u8054\u4fdd\u9669) presence in China<\/h3>\n\n\n\n
\"Allianz<\/figure>\n\n\n\n

[Source: allianz360.com\n\u201cglobal travel insurance for Chinese tourisms\u201d]<\/p>\n\n\n\n

As a globally famous financial service company, Allianz entered the China\u2019s insurance market in 2003 and built partnership with JD (\u4eac\u4e1c) to be a joint venture company in China. By working with JD, Allianz effectively expanded its online sales channels to benefit from China\u2019s booming e-commerce market. The travel insurance products of Allianz cover different kinds of accidents, medical treatments, luggage, personal property, visa, flight delays and road rescue. Allianz launched the “digital first” strategy in China to make use of the huge mobile network, the company created a mobile app to digitalize the process of insurance purchasing and customize insurance products for consumers. Besides, consumers can implement self-service claims by using the WeChat account of Allianz. Through those strategies, Allianz provided superior quality service to the Chinese consumers and expended its market in China.<\/p>\n\n\n\n

AIG (\u7f8e\u4e9a\u4fdd\u9669) presence in China<\/h3>\n\n\n\n
\"AIG<\/figure>\n\n\n\n

[Source:\naig.com.cn \u201cdomestic travel insurance for Chinese tourists\u201d]<\/p>\n\n\n\n

AIG insurance belongs to the American International\nGroup and it is one of the largest wholly foreign-owned insurance companies in\nChina. The company provides travel insurance to more than 1 million<\/a>\nChinese consumers every year. In 2017, the total premium of AIG insurance reached\n1.6 billion\nRMB<\/a> in China. The company localized in China by building seven\nbranches in Shanghai, Beijing, Shenzhen, Guangdong, Jiangsu and Zhejiang. The\ntravel insurance products of AIG target overseas tourism, domestic tourism,\nroad trips and island tourism. In order to adapt the Chinese tourism market, AIG\nalso launched distinctive insurance products, such as insurance products target\non smartphones and outdoor activities like surfing, skiing, diving, etc.<\/p>\n\n\n\n

The potential opportunities of the travel insurance market\nin China<\/h2>\n\n\n\n

Customized\ntourism<\/a> is becoming more popular in China, along with\nindependent tourism and niche destination tourism. Chinese tourists are also\ntrying more dangerous activities while traveling, such as bungee jumping,\nparagliding, and surfing. These types of activities often require insurance\npackages to cover any risk of injury. As more travel that is adventurous\nbecomes more popular among Chinese tourists, creating more opportunities to\nenter the travel insurance market in China.<\/p>\n\n\n\n

Children and seniors <\/a>have\nstrong demands for travel insurance. Tourism is one of the most popular leisure\nactivities for the Chinese\nsenior citizens<\/a>, in fact, seniors make up more\nthan 20%<\/a>\nof China\u2019s tourists every year. However, there are not many travel insurance\nproducts targeting seniors, and single insurance products are unable to adapt\nto the diverse needs of consumers. \n\nAs\nthe number of travelers from and within China will very likely continue to\nincrease, insurers should seize the opportunity to increase their market share\nby developing new products and identifying new customers groups, and making\ntravel insurance more easily accessible.\n\n\n\n<\/p>\n\n\n\n

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Our report on Chinese travellers:<\/h4>\n\n\n\n