Annuities are expected to see stronger growth across Asia-Pacific as markets transition from saving to retirement income, particularly in ageing economies where large pools of household savings are beginning to move into drawdown. "The strongest growth potential is in markets that are now transitioning from saving to retirement income at scale," said Challenger Chief Executive for Insurance Anton Kapel in an interview with Asia Insurance Review.
Mr Kapel said Australia is slightly ahead in this shift, while similar trends have been observed across North Asia, particularly Hong Kong and South Korea. “Large pools of savings have been built, but the next challenge is converting that capital into reliable income,” he said, adding that ageing is reshaping financial behaviour as more people move into retirement and face evolving risk profiles.
He noted that this transition affects both social policy and capital deployment. “Ageing does not just change social policy, it changes how capital behaves,” he said. “As populations move into drawdown, sequencing risk, liquidity needs and risk tolerance all shift materially.”
He also highlighted that culture still plays a strong role in adoption, as many APAC markets traditionally rely on family support and holding savings rather than using formal income products, although this is gradually changing. “What we see consistently is that when people understand how guaranteed income can support essential spending, it improves confidence,” he said.
For more insight into this topic, check out our upcoming May issue of Asia Insurance Review.