4 from 15 to 17, the 2022 Tsinghua Wudaokou global financial forum with the theme of “stability and long-term development, finance contributing to high-quality development” was held in Beijing
At the meeting, Zhou Yanli, member of the Economic Committee of the CPPCC National Committee and former vice chairman of the CIRC, Zheng Bingwen, member of the CPPCC National Committee and director of the world social security research center of the Chinese Academy of Social Sciences, pan Yanhong, Secretary of the Party committee and chairman of China Pacific Insurance (Group) Co.Ltd(601601) 601 life insurance, and other guests from the regulatory, academic and insurance industry discussed the prospects and future of China’s economic and financial development under the influence of population aging.
Zhou Yanli: promoting the standardized development of the third pillar of elderly care
Overall, China’s commercial endowment insurance is still in the primary stage of development. The scale of pension annuity insurance, the proportion of premium income in life insurance is only about 2%, and the accumulated liability reserve accounts for less than 1% of GDP. The external environment for the development of commercial endowment insurance still needs to be improved, and the insurance industry itself also has some difficulties and problems that need to be improved.
In this regard, Zhou Yanli suggested taking multiple measures to promote the standardized development of the third pillar of China’s elderly care.
first, we should pay more attention to the role of the third pillar in promoting high-quality economic and social development developing the third pillar can enhance the sustainability and flexibility of the multi-level and multi pillar old-age insurance system, effectively connect China’s basic old-age insurance, and help solve the problem that the enterprise annuity system is difficult to cover employees of small and medium-sized enterprises and flexible employees. In the top-level design, give full play to the function of commercial insurance. By vigorously developing commercial old-age insurance, we can alleviate the pressure of basic old-age insurance and finance, expand the coverage, make more people free from the restrictions of employment forms and employment units, carry out more effective long-term pension accumulation, and effectively enhance the stability and sustainability of China’s old-age security system.
second, clarify the development orientation of the third pillar based on China’s national conditions and focusing on the coordinated development of the third pillar (personal savings endowment insurance and commercial endowment insurance) and the first and second pillars (basic endowment insurance, enterprise annuity and occupational annuity), we should closely connect the coverage of people, preferential policies, fund management and fund collection, jointly establish an effective endowment insurance system with Chinese characteristics and improve the level of multi-level and multi pillar endowment security system.
third, strengthen fiscal and tax policy support considering that general financial products do not have the function of risk protection and long-term collection, special arrangements should be made for the tax deferral policy of commercial endowment insurance. It is suggested to learn from the development experience of the third pillar of the United States and make it clear that commercial endowment insurance is a special financial product for the elderly with the function of long-term protection. We can learn from 401k model, list one category separately and give a higher tax deferral amount, for example, Clearly give individuals 2000 yuan limit, which is only used to buy commercial endowment insurance. At the same time, based on the pilot experience of tax deferred insurance, it is suggested that relevant departments promote the construction of individual pension system and expand the tax deferred policy to deposit, financial management, insurance, fund and other financial products, so as to further enrich individual pension options.
fourth, deepen the structural reform of pension financial services and promote the standardized development of the third pillar first, we should speed up the research and unification of financial service standards for the elderly, reflect the characteristics of capital security, long-term investment, management effectiveness and receiving constraints, accurately serve the needs of the elderly, launch financial and insurance products, adhere to the policy of “long-term investment, long-term income, value investment to create value, prudent investment and reasonable return”, and reflect the policy intention and mission of “standardizing the development of the third pillar endowment insurance”. Second, mobilize multi subject capital to participate in pension financial services. Provide the long-term endowment insurance business required by the pension group. With the continuous deepening of the structural reform of pension financial services, the third pillar of pension insurance will gradually form the participation of multiple subjects and the supply of multiple products to meet the diversified needs of pension insurance consumers.
Zheng Bingwen: now is the most favorable window for establishing pension
Zheng Bingwen bluntly said that China’s aging rate is very fast. From aging to aging, China has only taken 22 years, which is shorter than that of most developed countries. It is also expected that China’s population will grow negatively in 2022, 10 years ahead of the negative growth predicted by the United Nations during the 16th Five Year Plan period.
In addition, the aging population will lead to a further increase in the dependency ratio of the elderly population. The dependency ratio of China’s elderly population was 17% in 2020, which is expected to increase to 25% in 2030 and more than 43% in 2050, surpassing that of most developed countries. Moreover, the average life expectancy of China’s population has also increased very fast. It is predicted that it will grow by one year during the 14th Five Year Plan period, that is, it will increase by one year in about five years.
Aging will also lead to a decline in the proportion of household gross savings rate to disposable income. “Although China’s savings rate is declining, it is still at a high level compared with developed countries. Now is the most favorable window period for establishing pensions.” Zheng Bingwen said.
in his opinion, compared with the first and second pillars, the institutional attribute of the third pillar individual pension has many particularity: decentralization, independence and actuarial neutrality “so theoretically, it can cover all people.” The third pillar pension is a special institutional arrangement of savings nature. It is a basic, inclusive and thorough institutional arrangement in the process of promoting common prosperity.
on the one hand, pensions help to prosper the capital market and provide long-term capital pension can increase the long-term capital of institutional investors. Under the impact of the conflict between Russia and Ukraine and the epidemic, a large number of foreign LPS withdrew. The proportion of pensions in China’s stock market is very low, while the average in developed countries is about 20%.
At the same time, pensions can provide long-term equity capital. Our country’s equity capital accounts for only 5.4% of the total social financing. Since the introduction of the new asset management regulations, we have less long-term capital.
On the other hand, it helps to hedge the impact of aging on the economy first, it can stabilize consumption expectations and leverage consumption China’s pension arrangements account for less than 1% of household wealth, while some countries account for 30%, 40% and the UK 60%. In China, real estate accounts for 60% of household wealth, another 20% is movable property, and the remaining 20% is financial assets.
second, the “offshore” long-term capital helps to transform the market potential into new business forms local onshore long-term equity capital is absent. When bat started its business 20 years ago, venture capital came from abroad, which is an important inspiration for us. We should develop onshore long-term equity capital.
third, it is conducive to technological innovation pension system is an important condition for large economies to build an innovation driven growth mechanism. As a long-term capital, it can promote scientific and technological innovation to play a key role in smooth circulation and create external conditions for strengthening the dominant position of enterprise innovation.
finally, pension can be used as a factor of production to feed economic growth pension is long-term capital, and economic growth is the absorption of land, capital and labor. At present, labor and land are scarce, capital and capital are scarce, and long-term capital is even more scarce. Pension is not only the arrangement of people’s livelihood system, but also a factor of production and a part of the economic system.
pan Yanhong: the insurance industry has unique value in the supply of pension finance
In Pan Yanhong’s view, different from the financial or savings products of other financial institutions, the insurance industry has irreplaceable unique value in building “accumulating pension wealth, resisting longevity risk and building industry service ecology”.
on the one hand, the insurance industry has irreplaceable professional value in the ability to resist the risk of longevity through scientific, accurate and reasonable pension planning relying on professional actuarial technology such as life table the life table based on big data of the insurance industry is the technical basis for the industry to accurately cover the risk of longevity. At present, the third set of life table being used by the industry is based on 340 million insurance policies and 1.85 million compensation cases, covering 180 million population data, which has laid a solid data foundation for the industry to bear the risk of longevity.
on the other hand, long-term insurance products, of course, need to be matched by long-term investment and capital increase capacity after years of accumulation, the insurance industry has also gradually established a set of asset liability management system based on the characteristics of liabilities in terms of long-term capital investment, which meets the requirements of multiple objectives such as duration, liquidity, income and risk, so as to realize the purpose of crossing the cycle, smoothing the market fluctuation and obtaining stable value-added pension wealth.
In terms of figures, during the eight years from 2013 to 2021, the average annual comprehensive return on investment of several listed insurance companies reached 5.59%, which not only outperformed CPI, but also the stability of investment income in each year was much higher than that of the stock market. “Some people may say that this return is not very high in absolute terms. Indeed, it may not be much compared with the high return of the stock market, but the high return of the stock market is rare after all, and the temporary high return does not represent the long-term high return, but the stable and sustainable return is the characteristic of insurance investment and the most suitable characteristic of pension investment, that is, the long-term continuous appreciation on the premise of stability Ability. ” Pan Yanhong said frankly.
from international experience, the development and growth of pensions can play an important role in stabilizing the capital market. However, from the perspective of China, the proportion of pension investment in the stock market is still very small. With the gradual expansion of China’s individual pension scale, it is also expected to play a more important stabilizing role in China’s capital market
“By combining the long-term capital advantages with the layout of the health care ecosystem, the insurance industry is showing unique comprehensive value in building a health care industry service ecosystem.” Pan Yanhong added.
Insurance consumer demand is upgrading from simple insurance products to comprehensive solutions including wealth management and health and elderly care services. This not only comes from the natural extension of customer demand, but also because there is a large mismatch between the supply side of health and elderly care and multi-level demand from quantity to quality. Especially with the continuous improvement of living standards, people’s demand for healthy life and quality pension has gradually become a consensus and rigid demand. Relying solely on the strength of government medical and civil affairs departments obviously can not well meet the upgrading and change of this demand.
From the perspective of the capital and asset characteristics of the insurance industry, it is highly consistent with the demand characteristics of the health care industry for social capital. The construction of pension and health industry has a large amount of investment, long investment period and lagging return cycle, which is difficult for most social capital to bear. The characteristics of long-term investment funds and stable return of life insurance industry naturally fit with the pension industry and can participate in the development of the health care industry for a long time, continuously and stably.
