(Yicai Global) Oct. 29 -- China's rapidly ageing society presents global financial firms with a tremendous opportunity, Roy Gori, President and Chief Executive Officer of Manulife, a leading financial services group, told Yicai Global on a recent trip to Shanghai.
Toronto-based Manulife, which already has in place China insurance and wealth management joint ventures as well as a WFOE, sees an opportunity in the retirement space, said Gori. Financial services also have a key role to play in dealing with certain big challenges that the country faces, he added.
China currently had 249 million citizens aged 60 or more at the end of last year, according to official data. In recent years, the government has stepped up efforts to develop diversified elderly care services and encourage financial firms to work on long-term pension products and elderly care insurance.
"If China looks to establish a pension infrastructure," Gori said, that would provide the chance to work with "companies like ours who've got experience in this space to ensure that we can create the platform in collaboration and actually bring solutions to solve the problem."
Manulife has extensive experience in the retirement arena in the US, Canada and Asia markets, Gori said.
He also pointed out that the retirement gap, or the difference between the funding people need for life after retirement versus what they have saved for retirement, is huge. In China, the figure could reach USD100 trillion by 2050.
Manulife partnered with industrial giant Sinochem Group in 1996 to establish China's first foreign joint venture life insurer, Manulife-Sinochem Life Insurance. And Manulife also had TEDA as its wealth management business partner.
China recently announced that it will continue to encourage overseas financial institutions and funds to enter the domestic market and plans to remove the shareholding cap for foreign firms.
"We'd be delighted to increase our share," he added, "but we are also very happy with our partnerships. Our partners agree that focusing on the business growth is the current priority."
Since digital has become a new consumer trend, Manulife is trying to transform itself into 'a digital and customer-centric company.'
"For our industry, we have to stop thinking of technology as a cost but rather an enabler to success and to the future that we want to create," Gori said, adding that China is now becoming one of the company's leading franchises globally for technological innovation.
Manulife-Sinochem is investing significantly in digital products for Chinese consumers. In 2016, it launched a WeChat claims service, allowing clients to submit claims through the instant messaging platform.
Nearly 69 percent of claims (for individual businesses) in China are now being processed digitally, according to the company. More than 61 percent of WeChat claims are fulfilled within a single working day. Gori said this is dramatically different to what the firm did five years ago.
"When customers think about insurance, they don't normally think tech savvy," he said. "They normally think paper-based and manual. This is where our industry has really lag behind the customer."
"The customer is now much more digital. Think about the way you interact on a daily basis. It's through phone, and it's through an instant, intuitive mechanism," he added. "We have to really transform the way we do business so that it's more in sync with the way the customer wants to operate. That's going to require us to make lots of investments in technology but also into changing our processes."
In China, the company is introducing new digital services to its customers through different partnerships.
Manulife-Sinochem reached a long-term strategic partnership with Haodf.com, China's leading online medical platform, earlier this year. The tie-up gives the insurers' clients and family members the opportunity to enjoy Haodf's services, which include family doctors, tele-consultations, hospital appointments, medical expert services and comprehensive medical treatment.
"It's a great example of digital innovation and how examples in China can provide inspiration for us to provide similar services to customers across Asia and probably globally as well," said Anil Wadhwani, Manulife Asia President and CEO.
"We are starting to export the knowledge that we have here to other parts of the world which is tremendous because it really demonstrates that China is not only doing a great job, but it's actually world-class," Gori added.
In the digital age, the data collected from online platforms can provide enough medical information to serve customer needs and also lay the foundation for health services innovation and better management going forward, according to Manulife-Sinochem CEO Kai Zhang.
Gori agreed with that point, noting that data will change the shape of the financial industry as it gives consumers more knowledge and empowers them. "Consumers are very knowledgeable and they're very powerful as a result of that, which means that companies need to really lift their game," he said.
"It's a big, big shift and a big change and a big difference, and it's true in every sector," he added. "It's true in financial services; it's true in health; and it's true in retail."
Manulife plans to continue to invest in new technologies and Gori said the transformation is still in the very early stage. "I wouldn't even say that we are halfway through, but the progress that we've made is very encouraging and we are going to continue to accelerate our efforts in this space."