Against the backdrop of an accelerating demographic shift into deep aging, the issue of retirement is transitioning from a long-term expectation into a pressing reality. With longevity risk, disability risk, and the need for wealth preservation increasingly converging, reliance on savings alone is insufficient to support individuals through a retirement period spanning decades. How to construct and improve a multi-layered, sustainable pension finance system has become an increasingly urgent practical issue.
In a recent dialogue, Ma Xin, Vice President of China Pacific Insurance (Group) Co., Ltd. (CPIC), shared his insights. He noted that compared to Europe, the United States, and Japan, China is experiencing "growing old before getting rich," compounded by a declining birth rate that is rapidly weakening the traditional family support system for the elderly. Simultaneously, the development of China's pension finance faces challenges such as the relatively underdeveloped second and third pillars of the pension system and a low pension replacement rate. This uniquely Chinese aging landscape presents vast development opportunities for the pension market.
Ma Xin emphasized that pension finance is inherently a long-cycle business. It is not concluded with the sale of a single policy but resembles a long-term client relationship management process. Integration is not merely a slogan; it is about mechanisms, performance evaluation, and the logic of resource allocation.
**Vast Potential in the Pension Market** When asked about the current stage of China's pension finance development, Ma Xin reiterated the "growing old before getting rich" dynamic alongside a weakening family support structure. He highlighted several structural challenges: the overwhelming dominance of the first pillar (the basic state pension), the relatively insufficient development of the second and third pillars, a low pension replacement rate for employees at around 40% (far below the World Bank's recommended 70%), and room for improvement in residents' financial literacy, with nearly two-thirds of household wealth concentrated in physical assets and financial assets primarily held as cash and deposits with short durations. This distinctive situation creates broad space for the pension market's growth.
Regarding the nationwide rollout of the long-term care insurance system this year, often termed the "sixth social insurance," Ma Xin outlined several potential avenues for commercial insurance companies. These include participating in administration services for the government-led scheme, providing supplementary commercial long-term care products to cover gaps beyond the basic system, and integrating care services by connecting insurance with their own elderly care service ecosystems. As a key participant in the pilot phase, by the end of 2025, CPIC had been involved in government-led long-term care insurance administration services in 57 cities, covering over 120 million insured individuals, accumulating experience in areas like disability assessment and service quality monitoring. This operational experience, which requires continuous optimization and is not easily replicated, creates favorable conditions for seizing new market opportunities.
**CPIC's Strategic Focus in Pension Finance** Outlining CPIC's strategic priorities, Ma Xin described the focus on the three pillars: enhancing investment capability output for the first pillar, expanding coverage for the second pillar, and optimizing product and service offerings for the third pillar. In specific business areas like occupational and enterprise annuities, risk is managed through multiple managers and asset allocation strategies. For individual clients, efforts are being made to integrate annuity products with home-based elderly care services, extending into scenarios like safety monitoring and medical assistance.
CPIC is also emphasizing the connection between the second and third pillars through a "two-three pillar linkage" strategy. This involves converting corporate clients from the second pillar into individual clients for the third pillar through resource sharing and creating a closed loop where pension payouts can directly cover health and wellness service payments, eliminating the need for retirees to separately arrange service funds.
**Building an Integrated Ecosystem, Connecting Insurance and Services** In 2025, CPIC upgraded its "Big Health" strategy to "Big Health and Wellness." Ma Xin explained this adjustment was based on years of business accumulation, not a completely new starting point. Previous groundwork included products like the "Blue Medicare" long-term medical insurance (covering over 3 million people), the "Golden Sunset" annuity collective plan (exceeding 60 billion yuan in scale), and the "CPIC Home" elderly care communities established in multiple cities.
The most defining feature of the "Big Health and Wellness" strategy is the integrated ecosystem. This integration manifests in three ways: organizational, target, and ecological. Organizationally, in September 2025, CPIC established a group-level Health and Wellness Ecosystem organization with a three-tier structure and dedicated incentive systems. In terms of targets, clear quantitative goals for the next five years were set for health insurance and pension finance, and a comprehensive evaluation system was designed for service entities. Ecologically, CPIC is shifting its service focus from being "comprehensive" to "specialized," with each entity leveraging its strengths while exploring market-based pricing mechanisms between service and insurance units. Ma Xin stressed that integration is fundamentally about mechanisms, evaluation, and resource allocation logic.
Regarding CPIC's continued investment in elderly care scenarios, notably the "CPIC Home" projects, Ma Xin discussed the strategic shift from a primarily heavy-asset, self-construction model to a "combination of heavy and light assets, with a focus on light assets." The initial phase of land acquisition and community building aimed to quickly establish brand recognition and operational capabilities. Now, with those capabilities in place, CPIC aims to capitalize on urban renewal opportunities by adopting more light-asset models like leasing, renovation, and entrusted operations. The focus is on "city-center elderly care," locating facilities in urban cores or near mature communities so seniors can remain within their familiar social and medical circles. This approach reduces investment intensity and improves client acceptance.
From an operational perspective, occupancy in some mature projects is relatively stable, with demand concentrated in areas like professional care (especially for dementia), and medical support. Home-based care remains the primary choice for most seniors, but its implementation is challenging due to fragmented demand, uneven service supply, and an incomplete standard system. CPIC's "Centennial Residence" service addresses this by integrating high-frequency needs like safety monitoring, medical assistance, and care services, offering solutions such as risk monitoring, emergency response, connecting online consultations with offline medical resources, and providing rehabilitation and in-home nursing services.