The China Insurance Consumer Confidence Index (CICCI) in Q1 2024 was 70.9, representing an increase of 5.6 from Q4 2023 and decrease of 0.4 over Q1 2023. CICCI stayed within the high confidence range (65, 85], indicating an upward trend. In 2024, China's economy got off to a good start, with the foundation for economic recovery further strengthened. In Q1, insurance consumers have been more optimistic about the macro economy and the operating environment for the industry, and their consumption willingness in this respect increased, with insurance consumer confidence picking up significantly from Q4 2023.
Figure 1 Movement of CICCI since 2021
In terms of insurance types, the life insurance consumer confidence index and the property insurance consumer confidence index in Q1 were 70.5 and 71.3 respectively, with the former keeping within the high confidence range and the latter returning to that range.
Figure 2 Changes in Life Insurance Consumer Confidence Index
In Q1 2024, the life insurance consumer confidence index was 70.5, up 4.7 from Q4 2023 and 1.9 from Q1 2023, being within the high confidence range and reaching the highest value since Q2 2020. Indicators showed the following trends:
On a quarter-on-quarter basis, three primary indicators, which make up the index, rose, with confidence in macro environment rising the most. All primary indicators stay within the high confidence range. Six secondary indicators, which make up the index, grew on a quarter-on-quarter basis, with insurance service satisfaction increasing the most. All secondary indicators stay within the high confidence range.
On a year-on-year basis, there were two rises and one fall in the three primary indicators, with confidence in insurance industry and confidence in individual spending rising, both at their highest values since Q2 2020. Confidence in insurance industry increased the most and confidence in macro environment dropped. Of the six secondary indicators, four rose and two fell, with confidence in industry development, perceived industry policies, insurance service satisfaction, and consumer trust willingness rising, and confidence in economic environment and insurance spending willingness falling. Consumer trust willingness, insurance service satisfaction and perceived industry policies were the highest since Q2 2020.
In terms of consumers' willingness to purchase additional insurance in the future, 73.6% of life insurance consumers surveyed in Q1 were willing to purchase additional insurance in the next six months, up 9.4 percentage points from the previous quarter. To be specific, 48.3%, 47.1%, 43.7%, and 34.5% of consumers were willing to purchase accident, health, annuity, and life insurance respectively, down 5.7, down 9.2, up 16.4, and up 1.1 percentage points from the previous quarter. Consumers' willingness to purchase additional annuities and life insurance increased from the previous quarter.
The current recovery in life insurance consumer confidence has been further consolidated. Consumers' expectations of the economic environment improved significantly from the previous quarter, raising confidence in macro environment up to the high confidence range. Confidence in industry development, perceived industry policies, insurance service satisfaction, and consumer trust willingness were within the high confidence range for six consecutive quarters, and confidence in insurance industry continued to be consolidated. Insurance spending willingness kept stable, with consumers' willingness to purchase additional insurance picking up for the third consecutive quarter, reaching its highest value since Q1 2021. Consumer confidence tends to be optimistic, creating a favorable insurance marketing climate in the industry. In Q1 2024, the increased volatility of the stock market and the continuous reduction in bank deposit rates have highlighted the advantages of insurance products with relatively stable returns. Consumers' increased willingness to purchase additional annuity insurance shows a change in product preference. It is recommended that market players pay attention to changes in consumers' willingness to purchase, further enrich the supply of annuity insurance products, including pension annuities, and create exclusive insurance products for the flexibly employed group. That will help expand effective demand for insurance consumption. In addition, it is recommended that they further improve their service quality in light of the recent consumer rights protection activities to advance the high-quality development of the industry.
Figure 3 Changes in Property Insurance Consumer Confidence Index
In Q1 2024, the property insurance consumer confidence index was 71.3, up 6.4 over Q4 2023 and down 2.8 from Q1 2023, growing into the high confidence range. Indicators showed the following trends:
On a quarter-on-quarter basis, three primary indicators, which make up the index, rose, staying within the high confidence range. Specifically, confidence in macro environment increasing the most. Six secondary indicators, which make up the index, rose quarter by quarter, staying within the high confidence range. Specifically, confidence in economic environment increasing the most.
On a year-on-year basis, there were one rise and two falls in the three primary indicators, with confidence in macro environment rising, and confidence in insurance industry and confidence in individual spending falling. Of the six secondary indicators, one rose and five fell, with confidence in economic environment rising, and confidence in industry development, perceived industry policies, insurance service satisfaction, consumer trust willingness, and insurance spending willingness falling.
In terms of consumers' willingness to purchase additional insurance in the future, 70.4% of property insurance consumers surveyed in Q1 were willing to purchase additional insurance in the next six months, a slight increase of 0.4 percentage points from the previous quarter. To be specific, 56.6%, 54.7%, and 35.3% of the respondents were willing to purchase additional home property insurance, vehicle insurance, and flight delay insurance, respectively, up 9.0, 2.3, and 14.7 percentage points from the previous quarter. The percentage of consumers willing to purchase additional home property insurance and flight delay insurance reached the peak since Q1 2022.
The current recovery in property insurance consumer confidence has been further consolidated. Confidence in macro environment and confidence in individual spending recovered to the high confidence range, while confidence in insurance industry kept within that range. The rebound in consumer confidence has created favorable conditions for the marketing of market players. Recently, the fire control in China has been grim, with fires caused by electric bicycles occurring in many places. Therefore, the relevant departments recently organized a nationwide remediation campaign for centralized fire prevention and control. The increase in willingness to purchase home property insurance indicates a rise in consumer interest in the guarantee of such insurance. According to data from the Ministry of Transport, the cross-regional movement of people across society was expected to exceed 8.4 billion during the 40-day spring festival travel rush in 2024, compared with 4.7 billion during the 2023. Rapidly growing demand for business travel has led to an increase in consumer interest in travel protection, with willingness to purchase both vehicle and flight delay insurance on the rise. It is recommended that industry players pay close attention to changes in consumers' demand for insurance. They may take advantage of the rebound in consumer confidence and current activities related to consumer rights protection to provide new products and enhance the quality of services to meet the needs of consumers in protecting home property and travel. That includes expanding the service coverage of home property insurance, enriching the supply of insurance products for travel, and optimizing the pricing mechanism for new energy vehicle insurance.
In Q1 2024, the pickup in CICCI was further consolidated, reflecting a steady improvement in consumers' confidence and expectations in the macroeconomic environment, the industry operating environment and individual spending, and fostering a favorable consumer atmosphere for the stable and healthy development of the insurance market. It is recommended that market players fully implement the decisions and plans by the CPC Central Committee, and pay close attention to changes in insurance consumer confidence to accurately and efficiently prevent consumers' risks. This will improve the quality and efficiency of insurance consumer rights protection, consolidate the foundation of insurance consumer confidence, and make positive contributions to the high-quality development of the industry.
