Foreign insurers gear up to tap China's $1.6 trillion pensions business

"Poised"

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 percent in 2017 to 11 trillion yuan ($1.64 trillion) and are expected to more than quadruple by 2025, consultancy KPMG said in a report this year.

Underlining the potential, consultant Willis Towers Watson said China has one of the lowest ratios of private-employee annuity pension assets to GDP among major economies at 1.5 percent. That compares with 120.5 percent of GDP in the United States and more than 130 percent in Australia.

Prudential has a 50-50 life-insurance venture with China’s CITIC Group. Nicandrou said the venture is “well poised” to participate in the pension market but he did not elaborate on any specific plans.

Rob Leonardi, Asia regional officer for Italy’s top insurer Generali, said the firm was seeing progress in pensions reform in China.

“If this trend continues, we can expect more foreign funded companies to express further interest in the coming months,” he said. The company declined to give details about its plans for the market.

AIA, which operates the only wholly owned foreign life insurance business in China, declined to comment.