Georgina lee, Swimmer

Hong Kong insurance sector is eyeing China's USD 15.3 trillion savings to avert a crisis in its state pension system, the size of the world's second-largest economy.Georgina Lee and Enoch Yiu writing in South China Morning Post (SCMP), said that China turned to private insurers to help unlock USD 15.3 trillion of savings and avert a crisis in the state pension system as mainland insurers are tasked to convert savings into investment in retirement products as state pension pot seen drying up by 2035.The China Banking and Insurance Regulatory Commission (CBIRC) on Saturday announced a pilot programme to foster endowment plans offering stable returns over 10 years post retirement, making it part of the third pillar in China's pension system, on top of state-run schemes and corporate annuities.The one-year trial will take place from June 1 in the eastern province of Zhejiang and the city of Chongqing, according to the CBIRC statement. Six companies will participate in the programme, namely China Life Insurance, People's Life Insurance, Taiping Life Insurance, China Pacific Life Insurance, Taikang Life Insurance and Xinhua Life Insurance, reported SCMP.Hong Kong insurance sector is eyeing cross-border Connect scheme to help grease policy sales to mainlanders in the city, said Lee and Enoch.HSBC, the biggest bank in Hong Kong and Europe, currently offers a range of retirement savings and annuity products at its branches in mainland China and through the wealth planning salesforce of its insurance unit."As the population continues to age, we expect demand for these products to also grow," said Edward Moncreiffe, Chief Executive of the Hong Kong office of HSBC Life.Hong Kong's insurance industry has also been supporting the financial needs stemming from China's ageing population, with years of experience in underwriting medical and retirement products, according to Moses Cheng Mo-chi, Chairman of Hong Kong Insurance Authority.Mainland visitors to Hong Kong have been buying insurance policies for medical coverage and other long-term protection among others, Cheng added. At its peak in 2016, they amounted to HKD 72.68 billion (USD 9.37 billion) or 39 per cent of all premiums collected in the city.Those purchases, however, have slumped by 84 per cent to only HKD 6.8 billion in the first quarter from a year earlier. Months of social unrest, followed by border closures caused by the Covid-19 pandemic, have reduced those cross-border visits to a trickle, reported SCMP.Because of capital controls, mainland citizens are not allowed to exchange or withdraw foreign currencies in China for the purpose of investing in securities or buying insurance policies offshore.While they are not allowed to freely channel their onshore yuan savings into retirement plans offered by offshore service providers, they can buy such products in person in Hong Kong using their money parked in the city. A cross-border investment channel could help grease those purchases, said Lee and Enoch."The Insurance Authority is in talks with the mainland authority about Insurance Connect in the Greater Bay Area, to provide after-sale services and cross border sales in the longer term," Cheng added.People aged 60 or above accounted for 18.7 per cent of the nation's population, according to a once-a-decade census published on May 13. That is an increase from 13.3 per cent in the 2010 census as the working- age population, those from 15 to 59 years, shrank by 5 per cent.China's elderly population could reach 300 million by the end of 2025, and that the shortfall in the state pension pot could hit 10 trillion yuan in a decade, the Insurance Association of China said in November last year. A 2019 projection by the Chinese Academy of Sciences shows the pot would run out of money by 2035.( With inputs from ANI )Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Home

City

Latest News

Cricket

LT Premium

National

International

Maharashtra

Opinions

Chhatrapati Sambhajinagar

Nagpur

Entertainment

Photos

Business

Technology

Sports

Lifestyle

Social Viral

Lokmat Games

Health

Pahalgam Terror Attack

Tahawwur Rana

IPL 2025

CM Devendra Fadnavis

Mumbai Local

Weather Update

Georgina LeeFOLLOW

Georgina lee, Latest News

International :China's state pension system crisis: Hong Kong insurance sector eyes USD 15.3 Beijing's savings

China's ageing population, with years of experience in underwriting medical and retirement products has snow-balled into crisis of its state pension system and Hong Kong insurance sector is seeking this opportunity to unlock USD 15.3 trillion of Beij ...

International :China seeks private insurers help to unlock USD 15.3 trillion of savings, avert pension system crisis

Hong Kong insurance sector is eyeing China's USD 15.3 trillion savings to avert a crisis in its state pension system, the size of the world's second-largest economy. ...