China's efforts to focus more on domestic consumption for sustainable and balanced economic growth, along with a fast-growing middle-income group and the shifting dynamics of its demographics, will bring massive opportunities for global insurance companies, the top executive of global insurer Prudential said.

China's economy is undergoing a transitional phase, with a stronger emphasis on high-quality and consumption-led growth driven by its ongoing urbanization and modernization, said Prudential CEO Anil Wadhwani.

Though the transitional period presents challenges, including managing debt levels and addressing an aging population, the fundamentals of economic growth haven't changed, and the country will continue to contribute quite significantly to global growth, Wadhwani, who is the global insurer's first global head to be based in Hong Kong in its 175-year history, told China Daily in an exclusive interview.

"There is not a single country that, at least I know of, hasn't seen macroeconomic challenges, but it is more important how to manage them," Wadhwani said. "Based on some of the policymaking that is promoting greater consumption, I think the prospects only look bright for the Chinese economy in the medium to long term."

In particular, China has targeted its economic expansion at 5 percent for this year, which is an impressive goal as the country is already a super-sized economy, he added.

As the nation's middle-income earner group continues to grow and their incomes rise, there will be increased demand for insurance products and services. This presents an opportunity for Prudential and other companies alike to tap into the expanding consumer base and offer a wide range of insurance solutions, Wadhwani said.

China is also experiencing an aging population, resulting in a growing need for retirement and pension solutions. Prudential can leverage its expertise in retirement planning and provide long-term savings and investment options to address the pension gap in China, he said.

A report jointly released in March by the Insurance Association of China and the Swiss Re Institute has shed light on the inadequate insurance coverage for the middle-aged and elderly population in China.

According to the report, as of the end of 2022, the number of valid insurance policies held by individuals aged 45 and above accounted for about 30 percent of the total across all age groups, which falls short of the corresponding population proportion of 43 percent, indicating a significant insurance gap for China's middle-aged and elderly demographic.

In response to the relatively low market penetration, Prudential has been working closely with its local partner on the Chinese mainland, CITIC Financial Holdings Co Ltd, each investing about 1.2 billion yuan ($166 million) in cash into CITIC-Prudential Life Insurance Co Ltd, their 50-50 joint venture, in late December.

The capital increase reflects the belief of both partners in the attractive long-term prospects of the life insurance business on the Chinese mainland, Wadhwani said.