Manulife HK CEO: Asia fuels 'immense opportunities' for insurers
Aging populations present substantial growth opportunities for the insurance industry in Asia Pacific, particularly in North Asia and Greater China, according to Manulife (International) Chief Executive Officer Patrick Graham, who oversees the insurer's business across Hong Kong and Macau.
Speaking at the Milken Institute’s Asia Summit 2024, Graham painted a picture of a region undergoing significant demographic changes which are reshaping financial services.
Manulife
The CEO referred to projections showing that, by 2030, one in six people worldwide will be over 60, with 60% of them residing in the Asia region.
Additionally, China is experiencing an accelerated aging process, which may impact its economic growth before it reaches full potential.
"People are living longer, but not necessarily healthier. They don't have enough retirement savings. They don't have the social safety nets that exist in some of the Western countries we operate in," Graham added.
INSURANCE OPPORTUNITIES
From the perspective of Manulife and the life insurance industry, which operates on a long-term planning horizon, these demographic trends represent immense opportunities, he said.
“Consumers need access to affordable, quality healthcare and the ability to invest their cash in various assets to ensure their financial security in retirement,” said Graham.
Across different parts of Asia, these opportunities make up several distinct trends.
"North Asia is a tale of aging wealth transfer, and it's really about retirement solutions and health,” he said.
Meanwhile, “ASEAN and South Asia, with very different demographics, but equally challenging problems in terms of protection, is [about] early-stage savings and accessibility of healthcare," Graham added.
LONGER-TERM CYCLE
In Hong Kong, growing demand for healthcare and retirement solutions, combined with property market wealth and the city’s strategic financial position, have prompted insurers and financial service providers to adapt to these changing needs, said Graham.
While acknowledging short-term challenges in the property market, particularly across Greater China, the CEO alluded to the long period over which this wealth creation took place as a reminder.
"If you take a longer view, sure, maybe you purchased a property in Shanghai in the last four years, it's probably underwater, but there's been a two-decade cycle of wealth creation, largely on the back of that property cycle, which has seen hundreds of millions of people enter the ranks of the middle class in China alone," said Graham.
Those developments are now driving demand for new financial products and services, he said, and “a lot of that wealth is looking for alternative ways to generate returns.”
The insurance chief also highlighted Hong Kong’s pivotal and unique role in the regional financial ecosystem: “The access to the US dollar that Hong Kong provides to Chinese citizens, Hong Kong's privileged place in that ecosystem as China's most international city, and the access to capital markets and the US dollar, and the world's access to China."
He added that this has contributed to a booming insurance industry in Hong Kong post-pandemic, "largely on the back of that pent-up demand and those long-term cycles of wealth creation, which has fuelled the rise of the middle class and all the problems I touched on earlier about aging, healthcare, retirement gaps, savings gaps."