China's insurance companies bet on old-age care communities

Over the past few years, China's leading insurance companies, from Taikang and Ping An to New China Life, have ramped up their investment in building communities for the elderly.

"At present, 10 insurance institutions have invested in 47 old-age care community projects with a total of more than 84,000 beds," revealed Cao Deyun, executive vice president and secretary-general of the Insurance Asset Management Association of China.

An elderly woman enjoys leisure time with a nursing worker at the Tangshan Anxin Medical Pension Manor in Guye District of Tangshan City in north China's Hebei Province, March 24, 2021.  (Xinhua/Mu Yu)

Cao added that more than 234 billion yuan ($36.64 billion) has been invested by insurance companies in the upstream and downstream medical and health industries of the elderly care service sector through direct and indirect equity investment.

The presence of large-sized insurance institutions' investment in the sanatoria industry can be seen beyond first-tier cities such as Beijing, Shanghai and Guangzhou.

Taikang Life Insurance Company entered the field of health care in 2007, and just two years later, it was qualified to invest in the pilot old-age care community.

At present, the company’s elderly care communities, distributed throughout 22 key cities from the core areas of the Beijing-Tianjin-Hebei Region, Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area, southwest region and central China, are able to accommodate about 55,000 senior citizens. Thus far, seven of these communities have been put into operation with a total of nearly 4,500 elderly residents.

In May this year, Ping An Life Insurance unveiled a plan to build its first high-end elderly care community. With the increase in the aging population, insurance will play a vital role in supplementing the country's social security system, explained Yang Zheng, chairman and CEO of Ping An.

Following this industry trend, New China Life Insurance also established its own brand in the sanatoria industry, and established elderly communities in China's key cities, explained Li Quan, president of New China Life Insurance.

This trend of China's insurance companies betting on old-age care communities can be attributed to the bright prospects of the market, explained Wang Xujin, head of the Insurance Research Center of Beijing Technology and Business University.

At the same time, Wang pointed out that as the duration of liability from insurance companies is extended, the insurance funds need to be used for long-term investment, and the silver economy is a golden opportunity for such an investment.

The results of the seventh census released by the National Bureau of Statistics (NBS) recorded 264.02 million in the group aged 60 and above, up 5.44 percent from 2010 and accounting for 18.70 percent of the country’s total population. Among them, there were 190.64 million people aged 65 and above, or 13.5 percent of the total population.