The number of changes that the Chinese government is enacting in areas such as health insurance, pension and annuities is on Allianz's radar, he said.

For example, clients can pay 10 yuan ($1.44) to buy its pension annuity insurance product, or 19.9 yuan to buy one-year of public transportation safety insurance.

China offers consumers three ways to save for retirement - the national pension system, voluntary occupational pensions, in the form of annuities and covering only a minority of the population, and private savings, said Fang Lianquan, a researcher at the Center for International Social Security Studies of the Chinese Academy of Social Sciences.

The growth will come from the development of enterprise annuity and voluntary retirement products.

[Photo/Agencies]Anbang Insurance Group has walked away from a deal to acquire United States annuities and life insurer Fidelity & Guaranty Life for $1.6 billion after failing to get the necessary regulatory approvals, Reuters reported.

- China's total enterprise annuity funds hit 2.98 trillion yuan (about $419 billion) at the end of the first quarter of the year, official data showed.

In the first three months, the investment returns of enterprise annuity funds reached 44.02 billion yuan, with the weighted average rate of return standing at 1.55 percent, according to the Ministry of Human Resources and Social Security.

The country launched enterprise annuities in 2004 as a type of supplementary pension plan under which both employers and employees must contribute.

So far, the nation is running a combined pension system, under which the State basic pension system has covered over 1,030 million residents by the end of 2021 and the supplementary one - such as enterprise annuities and commercial insurance support covering over 58 million residents.

The private pension mechanism will complement the country's current pension system consisting of the basic old-age pension, enterprise annuities as well as commercial insurance for the elderly, offering another layer of support for the aging population, analysts said.

The regulator will promote endowment insurance institutions to focus on the development of the types of business that have a retirement planning feature, such as commercial endowment insurance and the management of enterprise and occupational annuity funds.

Difficulties such as poor benefits and low coverage of enterprise annuities still remain and progress has been slow.

Participants in sectors of enterprise annuity and occupational annuity reached about 58 million.

For example, annuities can be developed as a major pillar for the pension fund system.

Companies should be allowed to invest annuities in the capital market.

Currently, there are three major pillars of the pension insurance system in China: the State-run fundamental insurance, enterprises' annuity provided by employers and commercial pension insurance.

The premiums of annuity insurance grew 38.8 percent, while those of life insurance dropped 3.2 percent compared with that in 2019, the association said.

In breakdown, life insurance premiums reached 89.16 billion yuan, or 63.9 percent of the personal insurance's total, while annuity insurance premiums soared by 58.6 percent year-on-year to 28.32 billion yuan, ranking second in terms of income.

Zhang Wangjun, an official of the China Securities Regulatory Commission (CSRC), said more will be done to reform the investment side of the capital market, promote the counter-cyclical investment by institutions, and improve the investment channels of social security funds, insurance funds and annuity funds in a bid to foster long-term stable investment forces.

Efforts will be made to encourage mid to long-term funds into the capital market and promote positive interaction between the capital market and social security funds, pension funds, annuity funds and insurance funds, the report said.

Such insurance programs refer to private pension annuity products offered to improve income streams for the elderly, with pensioners receiving the start of their payments when they reach 60-years-old.

The national social security fund, basic pension fund and annuity fund will be supported to expand their capital market investment scope.

Thereafter, the multilayered system has begun to develop in China, comprising basic pension insurance, annuities and personal pensions.

Currently, China has a three-pillar old-age insurance mechanism, covering basic national old-age insurance, enterprise and occupational annuities, commercial old-age financial products and private pension plans.

The commission also vowed to keep the capital market running steadily, and to encourage medium and long-term funds such as social security funds, insurance funds and enterprise annuities to increase their investment in the capital market.

China has a three-pillar old-age insurance mechanism, covering the national basic old-age insurance, the enterprise and occupational annuities, and the commercial old-age financial products and the private pension plan.

The enterprise and occupational annuities, the mechanism's second pillar, covered more than 70 million employees.

Perceptions on and behaviors for retirement planning continue to improve when China's personal pension policy landed as a third pillar to support the country's pension system with the basic endowment insurance as the first pillar, and the enterprise annuity as the second.

The private plan will complement the country's current pension system consisting of a basic old-age pension, enterprise annuities and commercial insurance for the elderly, offering another layer of support for the country's aging population.

To facilitate the sustained development of REITs in China, Mo Yifan, a fund manager from China Asset Management, suggested that social security funds, annuities and the personal pension scheme should be considered to participate in REITs trading, as long-term and value investment are beliefs held by all.

Although a multi-layered and multi-pillar pension system has been preliminarily shaped in China, with basic pension insurance, annuities and private pensions all introduced in the country, the latter two have been developing at a relatively slower pace, said Wang Jian, chief analyst at the financial industry of Guosen Securities.

In the meantime, the central bank is paying attention to the reform of China's pension insurance system, including enterprise annuities and individual commercial pension insurance.

For China, a big issue is the development of enterprise annuities and individual commercial pension insurance which is lagging behind some major developed economies, and how to make the investments sustainable, said Liu Linan, general managing director of the asset and liability management department of the Postal Savings Bank of China.

"Therefore, the central bank should also pay high attention to the reform of the pension insurance system, including the construction of the second pillar (enterprise annuities) and the third pillar (individual commercial pension insurance), so that more pension funds can be invested in the capital market, including the market of sustainable investment," he said.

Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, said the futures market offers an important channel to preserve and increase the value of medium and long-term funds, including mutual funds, enterprise annuities and insurance funds.

The position size of China's mutual funds, enterprise annuities and insurance funds in the stock index futures market in July rose by 100 percent, 150 percent and 260 percent, respectively, from the beginning of 2020.

- China's total enterprise annuity funds reached a new high of 2.32 trillion yuan ($358 billion) by the end of the first quarter of the year, official data shows.

In the first three months, the investment returns of enterprise annuity funds neared 6 billion yuan, with the weighted average rate of return standing at 0.3 percent, data from the Ministry of Human Resources and Social Security shows.

By the end of March, the aggregate volume of enterprise annuity funds had increased by 66.79 billion yuan compared with the end of last year, while the number of participating employees rose from 27.18 million to 27.79 million during the period, the ministry said.

China has 22 enterprise annuity fund management institutions as of the first quarter, including 11 companies managing public offering funds.

The country launched enterprise annuities in 2004 as a type of supplementary pension plan, under which both employers and employees must contribute.

China's total enterprise annuity funds reached a new high of 2.32 trillion yuan ($358 billion) by the end of the first quarter of the year, official data shows.

Currently, there are three major pillars of the pension insurance system in China: The State-run fundamental insurance, enterprises’ annuities provided by employers and commercial pension insurance.

"As awareness of the need for insurance and retirement planning increases among mainland customers, products such as health and annuity insurance are becoming more popular," he said.

Currently, there are three major pillars of the insurance system: the State-run fundamental insurance, enterprises annuity provided by employers and commercial pension insurance.

As of the end of March, China's enterprise annuity funds totaled 1.86 trillion yuan ($262.3 billion), up 66.07 billion yuan from the end of last year, according to the Ministry of Human Resources and Social Security.

China launched enterprise annuities in 2004 as a form of a supplementary pension plan, under which both employers and employees must contribute to enterprise annuity plans.

In recent years, as the country's elderly population has increased, more and more employees have signed up for the annuity plans.

The average yield for China's enterprise annuity funds stood at 8.3 percent last year, with the aggregate investment return reaching 125.8 billion yuan ($17.7 billion), Shanghai Securities News reported Thursday.

By the end of last year, the total amount of the enterprise annuity funds neared 1.8 trillion yuan, covering around 25.48 million employees.

Having logged remarkable growth since 2013, annuity funds have become an important force in China's old-age security system, said the report.

China launched the enterprise annuity program in 2004, a supplemental occupational pension insurance offered through employers, in a bid to improve its social security system.

Qualified institutional investors include administrators of basic pension funds, social security fund and enterprise annuities.

To defuse financial risks at Anbang, the regulator approved the establishment of Dajia Insurance Group, which was registered on June 25, 2019 in Beijing with 20.36 billion yuan of capital, to take over equity in Anbang's life insurance, annuity insurance and asset management operations.

The annuity insurance unit of Dajia carried out pilot old-age service projects at core areas in cities.

Dajia is transitioning into the business model of mainstream insurance companies by moving from short-term business to medium-and long-term business while developing annuity and medical insurances.

China will promote effective conversion of household savings into long-term funds in capital markets by strongly developing enterprise annuities, as well as various health and endowment insurance products, according to the China Banking and Insurance Regulatory Commission.

The development of wealth management subsidiaries of commercial banks and insurers will further diversify household savings, which will be increasingly invested in medium－and long-term investment markets such as the annuity market.

Support will be given to developing, by drawing upon international experience, diversified pension annuity insurance products and medical insurance and accidental injury insurance that are tailored for the needs of those over 60 years of age.

Enterprise annuities and occupational pension schemes, of which the asset balance was 1.6 trillion yuan, accounted for nearly 30 percent of the market, according to the white paper.

… It is of great significance to bring in more long-term institutional investment of all kinds, especially corporate annuity funds — funds contributed by enterprises and employees to supplement employees' retirement benefits," Hong said.

By the end of June 2018, the company had approximately 275 million long-term individual and group members in life insurance, annuity products and accident and health insurance in China, the company's statement said.

Dan Houston, chairman and CEO of global financial investment management company Principal Financial Group, said earlier he has great confidence in the nation's huge pension market, and the challenges for the company in developing its business in China include persuading employers to adopt enterprise annuities and making Chinese people comfortable about using the sector's products to invest for the long term.

She said about 95 percent of the policies issued to mainland visitors this year were medical or protective in nature, such as coverage for critical illness, medical, whole-life, term-life and annuity products.

Insurance products set to be issued next year－which the authorities have greenlighted and generally feature a combination of bonus annuities and universal insurance－will be next year's growth points, according to the report.

It added that a certain proportion of new shares should also seek enterprise annuity funds and commercial insurance funds.

The second pillar involves enterprise annuities, and the third pillar is commercial endowment insurance.

"Previously, only public offering funds and social security funds could enjoy priorities to subscribe new shares offline, and now basic endowment insurance funds, enterprise annuity funds and commercial insurance funds have become new beneficiaries," said Hao Yansu, director of the school of insurance at the Central University of Finance and Economics.

Li Shaowei, vice-president of China Securities, said the participation of basic pension funds, enterprise annuity funds and commercial insurance funds can also help promote more market-oriented pricing of new shares.

The second pillar involves enterprise annuities and the third pillar is commercial endowment insurance.

A report released by Chinese Academy of Social Sciences found that the country's enterprise annuities totaled 134.3 billion yuan by the end of 2015, only accounting for 3.5 percent of the nation's entire pension funds.

Renee Schaaf, chief operating officer of Principal International, said China has good conditions to develop its enterprise annuity market.

CEO Daniel Houston said the challenges for the Principal Financial Group to develop its business in China included the need to persuade employers to adopt enterprise annuities, making Chinese people comfortable about using the sector's products to invest for the long term, and forming a good working relationship with the industry regulators.

He said the investment yield for enterprise annuity also plummeted to a five-year low of 3.03 percent last year.

Stephen Schwarzman, co-founder and chief executive officer of Blackstone Group LP BLOOMBERGBlackstone Group LP, the world's biggest private equity firm, is pushing into annuities to expand its investment-management operation.

Wall Street firms have increasingly been pushing into annuities, in which customers deposit cash in exchange for the promise of a guaranteed stream of income.

While the US market for fixed annuities has long been dominated by giant insurers like Allianz SE, American International Group Inc and policyholder-owned New York Life Insurance Co, upstarts have been gaining market share.

Enterprise annuity insurance, a supplementary plan for company employees, covered about 72 million people by the end of March.