As of May 2015, the number of 10 million HNWIs in mainland China has reached 1.21 million, up 11% year-on-year, the highest ever; the number of billion-dollar HNWIs is 78,000, up 16% year-on-year. The number of Hong Kong and Taiwan's 10 million HNWIs is 198,000 and 167,000 respectively, and the number of billion-dollar HNWIs is 11,000 and 9,000 respectively. With this huge population base, the high-end life insurance, pension and healthcare industries will see a period of rapid development in the future.
The survey found that the average age of mainland China's multi-million asset group is 40 years old, the billion dollar asset group is 44 years old, and the male to female ratio of HNWIs is 6:4. The total assets of HNWIs have reached 60.5 trillion yuan, with an average annual disposable family income of 2.55 million yuan, and the total annual disposable family income is 3 trillion yuan. The most important investment and financial management methods for HNWIs are deposit and real estate investment, 98% of HNWIs use these two methods for investment and financial management; followed by more than 70% choose insurance and financial investment products; 31% will invest in artworks, and 20% choose VC/PE.
The most interesting topic for HNWIs outside of work is financial investment. Recommendations from friends or relatives are the most important channels for HNWIs to get information about investment and finance.
HNWIs buy insurance for protection purposes
90% of the 10 million HNWIs, or 1.09 million people, have commercial life insurance, with an average annual premium of 37,000 yuan per person, and an annual premium of 40 billion yuan, accounting for 4% of the country's total life insurance. The average annual premium paid by the billion-dollar high-net-worth group is nearly 100,000 yuan.
Among the HNWIs who own commercial life insurance, 90% own medical insurance, 82% own pension insurance, and 73% own accident insurance, which shows that the HNWIs buy insurance more for protection purpose rather than investment means. This group of people strongly agrees with the importance of life insurance, with an average score of 7.9 (on a 10-point scale). The higher the asset class, the higher the importance of life insurance.
The survey shows that recommendations from relatives and friends are important factors for HNWIs to consider when purchasing life insurance, as well as being the main and most trusted channel for them to obtain information about life insurance, and the older they are, the more trust and reliance they have on this channel. The next most important channel is the insurance company, including the official website and sales staff.
The value-added services that HNW life insurance users most want insurance companies to provide are health checkups and sports and fitness. This demand is very similar to the expert opinion in the qualitative interviews. Experts believe that life insurance companies should strengthen pre-insurance services and increase pre-insurance interventions rather than settling claims after the insurance has been issued, especially in the case of health insurance, and that value-added services for health are therefore particularly important.
More than 70% of HNWIs are interested in middle- and high-end retirement communities
Chinese HNWIs have a high level of interest in middle- and high-end retirement communities, with more than 70% of them expressing interest, and the likelihood of moving in has also reached 45%. It is worth noting that men are more interested than women; the younger the age, the higher the interest in mid- to high-end senior living communities.
The survey found that professional medical care (including medical facilities and nursing staff) is the most important reason why mid- to high-end senior living communities attract millions of HNWIs, and the key to determining the success or failure of mid- to high-end senior living communities; followed by meal management, regular medical checkups, recreational activities, the natural environment, and facilities for fitness activities, which all have a proportion of more than 50%. The focus of the billion-dollar HNWIs is somewhat different, as they place the highest priority on the natural environment, followed by professional medical caregivers, dietary management, medical facilities, and aftercare, which shows that the billion-dollar HNWIs place a higher value on factors more relevant to their medical care and well-being when choosing a mid- to high-end community.
The report also made some interesting findings on the concept of retirement for HNWIs, such as the fact that HNWIs favor their friends over their children when choosing their retirement partners, and that the traditional three-generation situation is expected to change very soon; and that the ideal place for retirement is no longer the busy city center, but rather suburban residences close to the natural environment and residential communities with good amenities. Compared to their parents, HNWIs are more interested in enriching their old age through traveling and rich recreational activities, and they have higher requirements for the quality of their old age and a richer level of spiritual pursuit. Living with their children and grandchildren and enjoying the joy of family life are no longer the main factors for HNWIs to consider.
HNWIs also have multiple sources of retirement expenses, with 90% coming mainly from personal deposits/investment balances, and more than 60% each from personal real estate, pensions and commercial pension insurance. On average, 2.7 people in each HNWI household purchase commercial pension insurance, with an average total annual premium of 150,000 RMB. For value-added services of commercial pension insurance, HNWIs generally want to include high-end medical services, including high-end medical checkups, health management, and dietary rationing.
Rapid growth in demand for private hospitals and private doctors
While public hospitals are still the first choice for HNWIs to seek medical treatment, especially public tertiary hospitals, the survey found that private hospitals will be the most likely healthcare providers for Chinese HNWIs to try in the next three years, with 54% choosing Chinese-funded private hospitals and 48% choosing foreign-funded private hospitals.
Private doctors are not yet popular, with only 5% of the 10 million HNWIs using them, and only 8% of the 100 million yuan HNWIs, but the proportion of respondents choosing to try the service in the next three years has reached 40%, and 44% in first-tier cities in particular. It is worth noting that the overall post-use satisfaction rate of private doctors is as high as 80%, with more than half of them being very satisfied. This result reflects the high demand of HNWIs for comprehensive, targeted and private medical services.
The survey also shows that the factors that HNWIs focus on when seeking medical treatment are the sophistication of medical facilities, the hospital's area of specialization, the doctor's qualification and experience, and the hospital's reputation, followed by the level of the hospital, and then the overall quality of service and the hospital's geographic location. The billion-dollar HNWIs pay more attention to the attentiveness of doctors.
The proportion of HNWIs purchasing health insurance reaches 80%. Critical illness cash flow protection is the most important purpose of purchasing health insurance, accounting for more than 70%. Nearly 60% were to enjoy a better medical environment, followed by getting diagnosed with more advanced medical equipment and securing a better hospitalization environment. The survey also found that nearly 60% of high net worth health insurance users purchased the insurance through the recommendation of insurance company salespersons, while more than 50% of the billion dollar high net worth people have the subjective intention to purchase health insurance due to their stronger awareness of health and medical care.