Foreign insurers eye China's pensions business as Beijing opens up
As Beijing opens up to overseas companies, foreign insurers including Generali and Prudential are in early talks with authorities to enter China's private pensions sector, Reuters reports.
Hong Kong-based AIA Group and Manulife Financial are also gearing up for the $1.6trn pensions business in China, people with knowledge of the matter said.
Beijing gave approval to the first foreign joint-venture firm to establish a pensions insurance business last month and two of the people said China has been running pilot projects in three provinces involving foreign firms. Those projects end later this year.
The average longevity of people in China is increasing but the pension market remains under-penetrated"
Foreign insurers would compete with eight established Chinese pension insurance firms that dominate the potentially lucrative market, where the fast-greying population is set to produce 250 million people older than 60 by 2020.
"The average longevity of people in China is increasing but the pension market remains under-penetrated," Prudential Asia Chief Executive Nic Nicandrou told Reuters.
Last month, Heng An Standard Life, a joint venture between Standard Life Aberdeen and Tianjin TEDA International, became the first foreign joint-venture entity to receive regulatory approval by China to establish a pensions insurance company.
China's pensions assets, including those managed by the state, grew by 20% in 2017 to 11trn yuan ($1.64trn) and are expected to more than quadruple by 2025, consultancy KPMG said in a report this year.
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