Major banks and insurers in Hong Kong, including HSBC, Manulife and BOC Life, are drawing up plans to expand their services to older residents, a significant part of the city’s population.
People aged 65 and over made up 22 percent of the city’s 7.5 million residents last year, according to the statistics department. Since 1971, life expectancy in Hong Kong has increased from 67.8 years for men to 82.5 years and from 75.3 years for women in 2023 to 88.1 years.
BOC Life aims to expand its ‘RetireCation’ program launched last month, which allows policyholders to use the cash value of their retirement plans to pay for their stay at its partners’ properties in major cities on the mainland. The insurer plans to expand its coverage to Southeast Asia and Japan next year.
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“In the past, insurance companies focused on providing protection to families when breadwinners died suddenly,” said Wilson Tang, CEO of BOC Life, in an interview. “Now there is increasing demand for pension protection as people are living much longer. They need to start planning their retirement early.”
BOC Life CEO Wilson Tang on December 12, 2024. Photo: Jonathan Wong alt=BOC Life CEO Wilson Tang on December 12, 2024. Photo: Jonathan Wong>
Tang said the company will also work on products for high-net-worth clients, especially in the area of wealth planning.
Edward Moncreiffe, CEO of Global Insurance at HSBC, said there was strong demand for products that help families pass wealth on to the next generation.
“In Hong Kong, there is a growing acceptance among the wealthy first generation of using insurance as a wealth planning tool, with flexibility being one of their top priorities,” he said. “Our savings products offer our customers even more flexibility in tailoring how their death benefits are paid to their loved ones, as well as the ability to appoint a trusted individual to manage their policy in the event of unforeseen circumstances.”
HSBC Life sold a world record $250 million policy in January. As a result, the group’s new insurance value grew by 77 percent to $1.3 billion in the first half. Moncreiffe said there was strong demand among wealthy individuals for such a large estate planning policy.
Edward Moncreiffe, CEO of HSBC Global Insurance, at the HSBC main building in Central on August 26, 2024. Photo: Dickson Lee alt=Edward Moncreiffe, CEO of HSBC Global Insurance, at the HSBC main building in Central on August 26, 2024. Photo: Dickson Lee>
“The insurance industry can meet this demand because insurance policies have named beneficiaries, can be executed in private out-of-court estates, offer liquidity and divisibility and can pay out very high amounts of wealth transfer.”
HSBC introduced more features in its products related to the Mandatory Provident Fund (MPF), a mandatory pension scheme introduced by the government in 2000 to help retirees manage their accrued benefits and maintain financial well-being, according to Lo Tak- fonf, general manager of HSBC Pension.
“In particular, we have enhanced our withdrawal options to better meet the changing needs of retirees,” he said. “In addition to a lump sum and partial withdrawals, we now offer a monthly withdrawal option, providing a steady income for living expenses.”
Patrick Graham, Chief Executive Officer of Manulife (International) Limited, photographed in Ngau Tau Kok on June 3, 2024. Photo: Xiaomei Chen alt=Patrick Graham, Chief Executive Officer of Manulife (International) Limited, photographed in Ngau Tau Kok on June 3 , 2024. Photo: Xiaomei Chen>
Patrick Graham, CEO of Manulife Hong Kong, said the insurer is keen to have a bigger share of the silver-haired economy, where life expectancy is the second highest in the world. More than a third of the population will be over 65 by 2041, he added.
“We expect continued strong demand from this target group for various healthcare and savings solutions that meet their longevity needs.”
Manulife is the largest pension provider in the city, which has introduced annuities and MPF services along with life insurance products for retirees to ensure they have a stable income stream beyond retirement age, Graham added.
He said Manulife will introduce more health insurance for critical illnesses, medical treatment and other monitoring programs to meet the needs of the aging population in the Greater Bay Area. About 88,000 Hong Kongers aged 65 or older lived in the southern province of Guangdong in 2022, up 11 percent from 2017, government data showed.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice covering China and Asia for more than a century. For more SCMP stories, explore the SCMP app or visit the SCMP Facebook page Tweet pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.
