Pensions in China, Hong Kong, and Singapore: Opportunities for Insurers

by Wenli Yuan, March 21, 2011
Industry Trends


The aging population is a serious problem for many Asian countries. Asian pension systems are not providing an adequate retirement income, so there are many opportunities for insurance companies.

Celent's new report Pensions in China, Hong Kong, and Singapore: Opportunities for Insurers, discusses insurance companies’ role in the financial support market in mainland China, Hong Kong, and Singapore.

Since regulation and many other factors differ in China, Hong Kong, and Singapore, insurance companies must consider the entire three-pillar market structure when they plan their strategy to serve Asian retirees. As defined by the World Bank, the three pillars of protection for the aged are: a publicly managed, tax-financed social safety net; a mandatory, privately managed, fully funded contribution scheme; and voluntary personal savings and insurance.

Insurance companies could play an important role in both the second and third pillars of financial protection for the aging population, but they also face increasing competition from other financial institutions such as banks and trust companies.

“Pension companies’ premiums have grown quickly in China, but premium income in 2009 still only accounted for 11% of the entire corporate pension market,” says Wenli Yuan, Senior Analyst with Celent's Asian Financial Services Group and author of the report. “Pension companies compete with banks and trust companies in the role of trustee, with banks in the role of recordkeeper, and with fund management companies and securities firms in the role of investment manager.”


Celent suggests that insurance companies that want to focus on the pension business should keep a close eye on regulatory activities, think about innovative business models, and analyze different requirements, providing suitable products for various target markets. Some insurance companies are focusing on individual annuities, while others are extending their retirement businesses horizontally and/or vertically. The report discusses various business development models.

This 34-page report contains three tables and 16 figures.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

Executive Summary





Old-Age Dependency Increasing



Cultural and Economic Characteristics



Asian Pension Systems Are Not Providing Adequate Income for Retirees





Insurer’s Role in Corporate Pension



Insurer’s Role in Third Pillar



Business Development Model for Insurance Companies


Hong Kong



Insurer’s Role in Second Pillar



Insurer’s Role in Third Pillar





Insurer’s Role in Second Pillar



Insurer’s Role in Third Pillar


Final Thoughts


Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


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