“China is undergoing a huge demographic shift, with the proportion of its elderly population aged over 65 on track to grow from 10% [of total population] today to 24% by 2050,” Domenico Savarese, global head of ageing at Swiss Re, told China Daily. This means that from 144 million in 2015, the elderly population of China is expected to hit 330 million by 2050.
According to the UN, it only took China 34 years for its elderly population to double from 7% to 14%. This in contrast to France’s 115 years, and 69 years for the US.
While population ageing can be a problem, such as having too many elderly dependents compared to the working age population, Savarese thinks that it has a positive effect on the insurance industry.
“From the perspective of economics, the ageing society does have its upside, as tomorrow’s ‘gray population’ in China and around the world could translate into golden consumption and investment opportunities that insurers and reinsurers cannot miss out on,” he said.
With a less developed insurance market and inadequate social welfare, China relies mostly on family support to care for the elderly, according to a report by Swiss Re. Insurance accounts for only 2% of the nation’s ageing wallet.
The one-child policy, which was in place for 36 years, has left many families with only one working-age child to solely take care of the parents and grandparents, placing huge economic strain on the breadwinner. Low fertility and rural-to-urban migration also compound the problems.
“All of these are pieces of a puzzle that should be considered by policymakers and pilot market players to get a better understanding and vie for a share of the country’s promising albeit yet-to-be-explored silver economy,” Savarese said.
According to the report, as the insurance sector integrates itself into the lifecycle of the Chinese people, it will seek to play a bigger part in providing China’s elderly with solutions for “living well”.
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