This is the first of a three-part series unpacking the key findings of RGA’s new report, “Aging in Asia: Inclusive Insurance Study on Seniors,” which explores the outlook for senior-focused insurance products across the region. For more information, view the full survey report and infographics here.
As the senior population rapidly grows across Asia, older adults are eager to access private insurance products for post-retirement protection. That is one of numerous key findings from RGA’s newly released report, “Aging in Asia: Inclusive Insurance Study on Seniors.”
For the past few years, RGA Asia has recognized an increased demand for specialized insurance products tailored to the needs of underinsured seniors, including private health insurance, critical illness insurance, and life insurance.
To better understand these needs, in early 2024, RGA completed online quantitative research of consumers from eight key Asian markets: China, Hong Kong, Japan, Taiwan, India, South Korea, Thailand, and Vietnam. More than 1,600 respondents aged 55-80 years with mild health impairments participated in the research.
Across the geographic spectrum, the seniors surveyed reported that despite their relatively good health, they have trouble accessing insurance products. Seniors say they are frustrated by high premiums, face challenges in the underwriting process, and encounter insurance products that do not meet their needs or are too difficult to understand.
With the right product design and underwriting process, these challenges can be effectively met by insurers willing to connect with the burgeoning senior population across Asia.
This article shares findings from RGA's study and drills down into the landscape for insurance offerings tailored to the elderly population across Hong Kong, mainland China, and Taiwan.
More than 30% of East Asia’s population and almost 20% of Southern and Western Asia – more than 1.2 billion people – are projected to be older than 65 by 2060.1 Persistent low birth rates across Asia have pushed several markets, including Japan, Korea, Taiwan, and Hong Kong, over the “super-aged” tipping point. This advanced stage of population aging, where more than 20% of the population is older than 65, presents significant economic and social challenges related to providing sufficient healthcare, pensions, and caregiving support. These challenges are compounded as medical advances enable people to live longer with chronic disease.
Despite a growing need, insurance penetration among seniors remains low in Asia, a fact confirmed by RGA’s study and other industry sources. For example, in Hong Kong, only 21% of people aged 65 and above are covered by employer, company, or private medical insurance.2
The same group recognizes the need to secure additional insurance, in part prompted by the COVID-19 pandemic. Market research shows that seniors fear experiencing a major illness that could bankrupt or negatively impact their families. Seniors are also concerned about their ability to look after themselves and about having to rely on others, especially following health issues such as stroke, cancer, or chronic conditions.
When examining the desirability of specific insurance products, nearly all those surveyed expressed interest in life insurance, private health insurance, and CI products if they could find meaningful coverage at an affordable premium.
The rapidly graying populations of Hong Kong, China, and Taiwan present unique challenges and opportunities for insurers designing protection solutions for the elderly. Key takeaways from RGA’s survey point to shifting priorities around health management, income protection, and legacy planning as seniors in the region reassess their financial and insurance needs.
Already having a super-aged population, Hong Kong expects to see its 65+ community grow to 30% by 2031.3 The population aged 50 to 80, which could be considered the target market for senior insurance products, currently comprises 41% of the population.
Hong Kong seniors have traditionally bought savings plans that provide guaranteed returns/dividends and fixed deposits, neither of which provide sufficient financial support for unexpected medical expenses. Hong Kong's agent-driven insurance market has shied away from CI products for seniors because of concerns about cumbersome underwriting processes. Seniors, most of whom have at least mild impairments, remain wary about medical exams and are loathe to consider products they deem not providing sufficient value for the premium charged.
Yet if products become simpler, more inclusive, and more affordable, Hong Kong could be the next great market for senior products.
Hong Kong survey highlights:
China's population is aging faster than any other country in modern history. The number of people older than 60 in China is projected to increase from 12% today to 26% of the total population by 2050.4 The proportion of these impaired lives who can obtain insurance coverage remains very low, creating a significant coverage gap.
According to a McKinsey report, out-of-pocket medical expenditures for China’s population older than 65 amounts to 2 trillion RMB. Commercial insurance compensation covers only about 7% of this, highlighting a significant market gap.5 Insurance penetration among this massive senior population is also stymied by perceptions that senior-focused products are overly complicated and too expensive.
Most of the China disease protection market is dominated by whole life products, which seniors deem too costly. Direct insurers serving the market have limited experience in developing and distributing suitable products.
Shortening coverage terms to 10 to 20 years can help reduce premiums. Another strategy insurers could explore is incorporating accumulated cash value into protection products, an extremely attractive prospect for Chinese seniors.
China survey highlights:
Based on government forecasts, Taiwan will have the third-largest aging population percentage in the world by 2045, behind Japan and Korea.
Traditionally, the Taiwanese market viewed senior products as prohibitively expensive with strict underwriting, making them neither customer friendly nor easily accessible. This is a misperception. RGA launched Taiwan’s first senior product in 2022 to great success. The product was specifically designed with seniors in mind, with inclusive underwriting. RGA also shifted its approach to distribution channels and explored new options for the product. Around 20% of product purchases were made by the children of the seniors.
Taiwan survey highlights:
As Asia's populations rapidly age, insurers have a prime opportunity to tap into the underserved senior market with tailored solutions that provide health protection, income protection, and legacy planning benefits. By streamlining products and underwriting, using innovative distribution channels, and designing straightforward and affordable offerings, insurance carriers can meet the evolving needs of elderly consumers across Asia. With adaptations and an inclusive mindset, the insurance industry can play a vital role in supporting Asia's super-aged societies.
Discover opportunities from RGA's analysis of 1,636 respondents in China, Hong Kong, Japan, Taiwan, India, South Korea, Thailand, and Vietnam. Don't miss this comprehensive look at the rapidly evolving senior market in Asia: "Aging in Asia: Inclusive Insurance Study on Seniors."
[1] https://www.nia.nih.gov/news/census-bureau-releases-report-aging-asia
[2] The Thematic Household Survey Report No. 78 Census and Statistics Department, Hong Kong SAR, January 2024
[3] Hong Kong Population Projections 2022–2046, Census and Statistics Department, Government of the Hong Kong SAR https://www.censtatd.gov.hk
