China's commercial insurance industry was born in 1978, with the founding of the People's Insurance Company of China (PICC). For ten years, the PICC held a monopoly over the industry, holding back its development.

To make matters worse, the company shared regulatory powers for the industry with the People's Bank of China (PBoC) until just four years ago.

The industry cohort, as a result, remains relatively small. There are currently 30 insurance companies operating in China, in addition to 17 joint ventures with foreign insurers. Among these, a small group of major players dominate, including the PICC group companies.

Industry growth has begun to accelerate in the past few years, pushed by the declining availability of state-sector benefits, and the introduction of competition in the insurance industry. The Chinese insurance market is growing at twice the level of GDP. There are currently over 230,000 outlets offering insurance services, employing more than 1m.

Nonetheless, the insurance market is tiny by international standards. The entire insurance industry collected premium income for 2000 of Rmb 159.6 bn ($19.2 bn), up 14.5% on 1999. Life insurance premiums accounted for the majority at Rmb 99.8bn ($12bn) while non-life insurance premiums grew to Rmb59.8bn ($7.2bn), up 14.8% on 1999.

Total assets for the industry stood at Rmb337.4bn ($40.8bn) by end-2000. The China Insurance Regulatory Commission forecasts annual growth for the entire industry for the next five years at 12%.