Major banks and insurers in Hong Kong including HSBC, Manulife and BOC Life are lining up plans to expand their services to elderly residents, a sizeable segment of the city’s population.
People aged 65 and above made up 22 per cent of the city’s 7.5 million residents last year, according to the statistics department. Since 1971, life expectancy in Hong Kong has increased to 82.5 years from 67.8 for men and to 88.1 from 75.3 for women in 2023.
BOC Life aims to widen its “RetireCation” programme launched last month, which allows policyholders to use the cash value of their retirement plans to pay for their stay in properties provided by its partners in major mainland cities. The insurer plans to widen its coverage to Southeast Asia and Japan next year.
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“In the past, insurance companies focused on offering protection to families when the breadwinners suddenly passed away,” Wilson Tang, CEO of BOC Life, said in an interview. “Now, there is increasing demand for retirement protection as people are living much longer. They need to start early on retirement planning.”
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 firm will also work on products for high-net-worth customers, especially involving estate planning.
Edward Moncreiffe, CEO of global insurance at HSBC, said there was strong demand for products that allow families to pass on wealth to the next generation.
“In Hong Kong, there is a growing acceptance among the wealthy first generation in using insurance as a tool for estate planning, with flexibility as one of their top priorities,” he said. “Our savings products provide even greater flexibility to our clients 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 in January sold a world record US$250 million policy. This helped the group’s new insurance value grow 77 per cent in the first half to US$1.3 billion. Moncreiffe said there was strong demand from wealthy individuals for such jumbo estate planning policies.
Edward Moncreiffe, CEO of Global Insurance of HSBC, at HSBC Main Building in Central on August 26, 2024. Photo: Dickson Lee alt=Edward Moncreiffe, CEO of Global Insurance of HSBC, at HSBC Main Building in Central on August 26, 2024. Photo: Dickson Lee>
“The insurance sector can meet such demand because the insurance policies have named beneficiaries, can be executed in private outside probate, provide liquidity and divisibility, and can pay forward very high value sums of wealth transfer.”
HSBC introduced more features in its products related to the Mandatory Provident Fund (MPF), a compulsory retirement scheme introduced by the government in 2000, to help retirees manage their accrued benefits and maintain financial wellness, said Lo Tak-fonf, managing director of HSBC Pension.
“In particular, we have enhanced our withdrawal options to better meet retirees’ evolving needs,” he said. “In addition to 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>
Manulife Hong Kong CEO Patrick Graham said the insurer would like to have a bigger slice of the silver-hair economy, where life expectancy is the second highest in the world. More than one-third of the population will be over 65 by 2041, he added.
“We anticipate a continued strong demand from this demographic for various healthcare and savings solutions that address 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 stream of income in their post-retirement age, Graham added.
He said Manulife will introduce more health insurance for critical illness, medical treatments, as well as other check-up programmes to meet the needs of the ageing population in the Greater Bay Area. Around 88,000 Hongkongers aged 65 or above were living in southern Guangdong province in 2022, 11 per cent more than in 2017, government data showed.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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