In sub-sector breakdowns, life insurance premiums jumped 31.7 per cent to 1.7 trillion yuan, while health insurance premiums jumped 67.7 per cent to 404.25 billion yuan, the regulator said. The regulator said in January that China’s insurance premiums rose to 3.1 trillion yuan last year, but didn’t offer any breakdown numbers on sub-sectors.

Guo Zhenhua, head of insurance department at Shanghai University of International Business and Economics, said this year could be a bumpy year ahead for insurers.

“The rapid life premium expansion in 2016 was mainly thrusted by strong investment returns since 2015,” said Guo. “However, it will be a different picture this year considering the dropping investment yields in the sector.”

Duan Haizhou, a CIRC official, noted in a briefing in Beijing on Tuesday that insurers’ investment returns dropped in 2016 compared with a year ago due to lower yields from fixed investment amid the low interest environment and returns that shrank by 200 billion yuan from a sluggish capital market last year.

The benchmark Shanghai Composite Index lost 12.3 per cent in 2016, a market mired in bearish sentiment. The main gauge still advanced 9.4 per cent during 2015 due to a strong bull run in the first half of the year, though US$5 trillion was wiped off the value of shares during a rout between mid-June and late August when the market slumped by 43 per cent.

Chen Wenhui, vice chairman of the CIRC said last week that this year would be a “very difficult” one for the investment of insurance capital.

Zhong Ming, an insurance professor at Shanghai University of Finance and Economics, said the focus should be more on the industry’s core fundamentals to hedge against risks, introducing and nurturing more products against risks.

“Premium growth could fluctuate due to changing market conditions,” she said. “The focus should shift away from merely monitoring premium growth or scale, just as highlights should be moved away from GDP data but the underlying economic health.”

Jiang Li, deputy general manager of Huize.com, an online insurance marketplace, said he expects internet insurance to enjoy stable growth in the next three to five years thanks to the growing awareness of insurance among the younger generation.

“Health insurance enjoys strong growth potential both offline and online this year,” Jiang said. “It’s previously assumed that it’s very difficult to sell large-sum, long-term health insurance online but we have seen an emerging trend of the rise of such products.”

He added that products providing long-term health coverage were encouraged by regulators.

CIRC has vowed to return the industry to its core mission of providing long-term security and ramp up efforts to police the industry.

Last year, 117 insurance companies sold insurance online with small-sum protections such as parcel refund insurance, accounting for 73 per cent of newly sold policies online in volume. That particular type of niche product, which surged amid China’s booming e-commerce sector, gained 24.97 per cent year on year to a combined premium of 2.24 billion yuan in 2016.

In 2016, the concentration of life insurers scaled back slightly as the top 10 life insurance players accounted for 72.3 per cent of market share, down 3.55 percentage points from a year ago, the CIRC data showed.