Insurers Build Communities for Participation in Elderly Care

For insurance institutions, the elderly care industry is a booming industry in China in terms of combination between social benefit and economic benefit, said a top executive of a life insurer.

According to forecasts by the United Nations (UN), the proportion of people at the age of 60 or above to the total population in China will rise 16.55 percent annually on average over the next three decades and by 2030, the country will take the place of Japan to become the world's most aged society, with the proportion of people at the age of 65 or above ranking No.1 around the globe.

In line with the China National Committee on Aging, the consumption demand of the nation's old people has exceeded CNY 1 trillion and the figure will hit CNY 5 trillion by around 2050. 2011 is the first year of China's 12th Five-Year plan period, during which the nation aims to raise the number of nursing beds per 1,000 old people to 30.

In accordance with the international practice, a nation's elderly care industry always begins growing 10 years ahead of the end of the demographic dividend period. That is to say China's elderly care industry should have begun growing from as early as 2005. However, the fact is that the nation's elderly care industry is still on an initial development period. Thus, the unbalance between the rising demand and short supply creates a good opportunity, which has drawn the attention of some insurers. For instance, Taikang Life Insurance Co., Union Life Insurance Co., and China Life Insurance Co. have participated or prepare to participate in this sector via elderly care community projects.

This year, the issue is highlighted during the annual session of the National People's Congress and the Chinese People's Political Consultative Conference. "Socialized elderly care system will undoubtedly become a major approach for the nation's old people to enjoy the elderly care in a healthy way," Yang Chao, president of China Life Insurance (Group) Co., said in his proposals for the meetings.

As at the end of 2008, the nation had a total of 37,623 old nursing institutions with old nursing beds of 2.45 million, accounting for 1.5 percent of the nation's people at the age of 60 or above and compared to five percent to seven percent in developed countries and two percent to three percent in some developing countries. In addition, there are only 220,000 people serving in those old nursing institutions, with over 20,000 owning vocational qualification.