Standard Life launches China pension plan

Published on Saturday 12 January 2008 16:20

STANDARD Life has launched China's first group pension plan for small to medium-sized companies that attracts tax relief, as it plans to spread into new markets including Taiwan, Singapore and South Korea.

Heng An Standard Life (HASL), the company jointly owned by the Edinburgh-based life and pensions firm and TEDA Investment Holding Company, will be responsible for the launch.

Alan Armitage, Standard Life's chief executive for the Asia region, reported a "fairly buoyant" marketplace despite China's renowned reputation for imposing regulatory restrictions on foreign investors.

HASL's business continues to double year-on-year, with a 94% increase in premiums sold totalling 22 billion yuan by the end of 2007. This compares with 16% for a typical domestic life company.

Armitage said: "As the first life company in China – foreign or domestic – to launch a group pension plan attracting tax relief, we will test the product initially through our local partner's SMEs contacts." It will then be rolled out throughout China's provinces.

Armitage has operated for the last year at Standard Life's new hub in Hong Kong.

He could not supply target figures for the new group pension plan business venture, but the "sky's the limit" when it comes to attracting a highly consumer-minded new generation of young Chinese with money to spend.

To that end, HASL already employs a sales force of 2,300 and 700 other staff, with plans to increase its presence to 30 city locations – from the current 16 – in the short term, rising to 100 cities within the next five years.

Armitage remained coy on plans to expand beyond China, but revealed he had made exploratory business trips to Singapore, South Korea and Taiwan in the past 12 months.

He said he is well aware of reports that China's galloping economy is set to decelerate slightly in the coming months. He also acknowledges the decision by Chinese authorities to delay the election of a new chief executive in the former British territory and the impact that could have on individual Chinese attitudes.

"If anything we have seen the mainland market move more towards a capitalist structure, similar to the 'light touch' stance towards overseas investments of which Hong Kong is renowned.

"To that end, Standard Life's Scottish financial services expertise continues to gain traction in North Asia, as we continue to move our offering away from risk-based towards a focus on investment-linked wealth management," Armitage added.