Taikang Life and Hurun Report jointly released Retirement Planning and Healthcare of Chinese HNWIs 2015; 

This 65-page report is based on a study of 1,119 High Net Worth Individuals (HNWIs) from 35 regions across China, and 40 one-to-one interviews with HNWIs in the first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen. It is the most robust and serious report highlighting the needs and concerns of the Chinese HNWI in the fields of retirement planning and healthcare.

70% of Chinese HNWIs interested in retirement communities and healthcare facilities are make or break factor for high-end retirement communities.

A key finding is that 70% of HNWIs want to know more about high-end retirement communities. Professional healthcare ranks as the most important feature.

Individuals with CNY 10 million grow a record high.

As of May 2015, there were 1.21 million mainland Chinese individuals with personal wealth of CNY 10 million or more, an increase of 120,000 from the previous year, a record growth rate of 11%. For individuals with CNY 100 million or more, the growth rate hit a staggering 16%, to hit 78,000 individuals.

In Hong Kong and Taiwan, the number of individuals with CNY 10 million or more was 198,000 and 167,000 respectively, whilst individuals with CNY 100 million numbered 11,000 in Hong Kong and 9,000 in Taiwan. The total assets of mainland China’s 1.21 million HNWIs reached US$9.5 trillion.

Based on the size of Chinese HNWIs, there is a high expectation that the high end of life insurance, pensions and health insurance will boom.

They are very young.  Individuals with CNY 10 million are only 40 years old on average, whilst the average age of individuals with CNY 100 million is 44. The male to female ratio is 6:4. The average annual disposable income was US$400,000 per household, or US$470 billion in total disposable annual income.

Our survey revealed that cash deposits and real estate investments remain the most important wealth planning, with 98% of respondents having these. Insurance and financial investment products followed, with more than 70% of Chinese HNWIs investing in them. 31% invested in art and 20% in VC/PE.

Aside from work, HNWIs in China are most interested in financial investments. Friends’ or relatives’ recommendation is the main channel by which HNWIs get their financial information,

Most HNWIs buy insurance as a safety net rather than as an investment tool.

90% of China’s individuals with CNY 10 million currently own life insurance products. The average premium paid by each individual is US$5,800, and the scale of the annual premium paid by the HNWIs group reached US$6.3 billion, constituting 4% of China’s total life insurance purchases.

Of HNWIs who owned life insurance products, 90% owned health insurance, 82% endowment insurance, and 73% casualty insurance. This indicates that most HNWIs buy insurance as a safeguard rather than an investment tool. Among the 90% who own life insurance, they recognized its importance, scoring it on average 7.9 out of 10. The wealthier they were, the more importance HNWIs place on life insurance.

An important factor influencing HNWIs to buy life insurance is recommendations from relatives and friends. This is also their most frequently consulted and most trusted channel for obtaining life insurance information. As their age increases, their level of trust and reliance on this channel grows. Other channels of information include insurance companies, official websites and sales persons.

The types of value-added services that HNWIs would most like insurance companies to provide are health checks and fitness programs. This need is very similar to the opinions expressed by experts during our qualitative interviews. Experts felt that life insurance companies should strengthen their services before accidents happen, raising the intervention level, rather than waiting until an accident happens to carry out the insurance.

More than 70% of respondents expressed great interest in high-end retirement communities.

Chinese HNWIs have a higher enthusiasm towards medium and high-end senior living communities, with their interest reaching 70%. 45% believed they would need these communities. Males are more interested than females and the younger the respondents, the higher the enthusiasm towards retirement communities.

The professional healthcare expertise of these retirement communities is the main attraction for HNWIs. This includes healthcare facilities and nurses. Next come meals, regular physical examinations, leisure activities, natural environment and fitness facilities, with the ratio on average reaching 50%. Non-first tier city HNWIs favored regular physical examinations most, while those in first tier cities prefer scientifically reasonable physical activities and facilities. Individuals with CNY 100 million’ concerns are a little different. They care more for natural environment, followed by professional healthcare individuals, meal management, treatment facilities and recovery care. From this, we can see that when individuals with CNY 100 million choose medium and high-end communities, they pay more attention to factors related to treatment cultivation.

We were surprised to discover that friends were more in demand than children for spouses after retirement. Therefore, the traditional three generation family living situation will soon undergo a change, indicating that China’s HNWIs’ retirement perception is in the midst of a revolution.

The ideal retirement place for HNWIs is no longer the busy heart of downtown. In its place are residential districts with perfect facilities, and suburban housing close to favorable natural environments.

What is worth mentioning is the fact that HNWIs prefer traveling, using lavish and leisure activities to enrich their lives in old age, rather than the traditional retirement concept of enjoying a blissful life with children and grandchildren. From this, we can see that HNWIs themselves have higher expectations regarding the quality of their retirement lives, desiring a richer spiritual level.

HNWIs have various combinations of resources for retirement expenses, with 90% spending their personal savings or investment balances. Each of property, pension and commercial endowment insurance make up more than 60%.

An average of 2.7 people per family purchased commercial endowment insurance, with average annual premiums of CNY 150,000. Further, for a commercial endowment insurance value added service, HNWIs generally want to enjoy high-end health services, including high-end physical examinations, health management, and formulating suitable dietary plans.

Private hospitals and private doctors continue to rapidly expand.

Public hospitals are the first choice for HNWIs seeking medical help, especially level 3 public hospitals. Chinese HNWIs are mostly inclined to try private hospitals in the next three years, with 54% choosing Chinese private hospitals and 48% international private hospitals.

Currently, the percentage of HNWIs consulting private doctors is very low, at just 5%. Only 8% of individuals with CNY100 million have consulted private doctors. Although the utilization rate is not high, the overall after-use satisfaction level with private doctors reached a high of 80%, with more than half of them being very satisfied.

When HNWIs are seeking treatment, important factors affecting their choices include the progressiveness of the treatment facility, the hospitals’ specialized field, the doctors’ aptitude and the hospitals’ reputation. This is followed by the level of the hospital, the complete quality of service and the hospital’s geographical location. Individuals with CNY 100 million place more emphasis on doctors’ level of attentiveness. Regional differences show up in the frequency at which first tier city dwellers consider the location of the hospital, and their tendency to pay more attention to the level of doctor’s care and qualifications of the health institution.

The percentage of HNWIs buying health insurance has hit 80%. The cash flow guarantee for critical diseases is the main reason they purchase health insurance, with a proportion of 70%. 60% want to enjoy an excellent healthcare environment, followed by the desire to gain access to the diagnosis of advanced treatment facilities diagnosis and to guarantee a better hospitalization environment.

The survey also discovered that 60% of high net worth health insurance consumers make their purchase based on recommendations from sales people of insurance companies. Due to the fact that individuals with CNY 100 million have a stronger consciousness towards health and treatment, their subjective desire to buy health insurance is more than 50%.

During the press conference, Taikang Life Chairman and CEO Chen Dongsheng said, “Retirement planning and healthcare are concerns everyone has and Taikang is a leader in the development of this industry, committed to providing health and wealth management services for Chinese HNWIs. I hope this report can contribute to sustainable development of the retirement planning and healthcare sectors. I am delighted to put out this report in association with Hurun Report, the authority when it comes to understanding and researching Chinese HNWIs.”

Rupert Hoogewerf, Chairman and Chief Researcher of Hurun Report, said, “The rapidly aging population is driving forward retirement planning, with 70% of Chinese HNWIs wanting to know more about high-end retirement communities, which combine healthcare and retirement. I am delighted to work with leading insurance firm Taikang Life to put out this report.”

For details, please refer to the full 65-page report, see www.hurun.net