(Yicai) April 2 -- Despite downward pressure on interest rates, leading Asian insurer AIA Group believe the opportunities in China's life insurance market far outweigh the challenges, thanks to factors such as the country’s aging population and favorable policies.

The Hong Kong-based firm will be further increasing its investment in the Chinese mainland market, Yicai learned in an interview with Lee Yuan Siong, AIA’s chief executive officer and president, and Zhang Xiaoyu, regional CEO and chairman of AIA Life Insurance, its wholly owned mainland subsidiary.

According to company data, AIA Life achieved new business value of USD1.2 billion last year and recorded a growth rate of over 20 percent in the first two months of this year.

The mainland “is the most important market for AIA, and as the group CEO, I can tell you this very clearly,” Lee said. “Whether in terms of future growth potential or contribution to the group, I believe it ranks first.”

China's life insurance industry faces challenges such as structural changes and declining interest rates, Lee noted, but in the long term "the opportunities far outweigh the challenges."

Both this year's Government Work Report and the 15th Five-Year Plan mentioned commercial insurance as an important component of the country’s multi-tiered social security system, and there are high hopes for the industry's development.

"The 15th Five-Year Plan period is a crucial starting point for China's journey toward basically achieving modernization by 2035, and it also marks a critical period for the life insurance industry's transformation from scale expansion to high-quality development," Zhang said.

He added that the industry now faces three core opportunities: continuous growth in demand for health and pension protection against the backdrop of an aging population; a significant increase in demand for long-term, stable protection products and professional services due to the ongoing optimization of people’s risk awareness and wealth structure; and a further strengthening of insurance's functional role in serving the real economy, supporting green and low-carbon development, and social governance.

For overseas insurance companies such as AIA Life, the further opening of China’s financial sector offers regional expansion benefits and vast development potential, Zhang noted.

Editor: Tom Litting