Some insurance companies in China have started to invest in retirement communities
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23 March 2011Wenli Yuan
Insurance companies in China apply different business model in regard to retirement business. Some insurance companies focus on individual annuity, some are extending retirement business horizontally, selling corporate annuity, group pension, and individual annuity; and some companies are extending retirement business vertically, such as enter into retirement apartment business. In China, reverse mortgages face cultural opposition and will not be popular in the next five years. The main reasons are:
- Old people want to leave their apartments to their children after death.
- There is no legacy tax in China.
- The possibility of apartment prices going down is the main factor that worries financial institutions.
- Banks do not have sufficient data for life expectancy.
- Regulations are not complete: China land usage is limited to 70 years. If it is not renewed or does not get approval, then theoretically the land reverts to the state.