As the special functions of insurance－risk management, economic compensation, financing and social management－cannot be replaced by other services, it is necessary to expand the coverage of the nation's insurance system, Zhou said.

With the expected new policies likely to be designed to support the personal insurance sector, China will command a huge market in commercial endowment insurance with enormous potential, he said.

In December, an executive meeting of the State Council, China's Cabinet, called for stepping up the development of commercial insurance.

Commercial medical insurance products that suit the needs and paying capacity of the elderly shall be developed. Insurance companies will be encouraged to incorporate certain medical expenses that are within a reasonable range, yet outside of basic medical insurance catalog, into insurance coverage.

As for life insurance, the development of economy and society, and rising personal incomes, require improvement in the level of assurance, including medical treatment and income compensation, to limit the impact of diseases and accidents on people's personal finances and general well-being, Zhou said.

The COVID-19 pandemic has not disrupted China's insurance industry so far, he said. In 2020, the total premium income reached about 4.53 trillion yuan ($690.8 billion), up 6 percent year-on-year.

Life insurance premium income totaled 3.33 trillion yuan, up 7.5 percent year-on-year, according to data from the China Banking and Insurance Regulatory Commission, which has since incorporated the CIRC that Zhou co-led.

"The sound development was due to the promotion of artificial intelligence, internet technology and digitalization in the insurance industry," Zhou said.

Given the growing retail demand and measures to accelerate the opening-up of China's insurance sector, foreign asset managers are likely to enter the onshore market at a faster pace, said Wang Lan, an analyst of the Financial Institutions Group at Moody's Investors Service (Hong Kong) Ltd.

"Some foreign players may also seek to enter or expand their presence in the Chinese institutional market, including by winning mandates from State and corporate pension plans," said Wang.