fbpx Social Insurance in Asia and the Pacific: 12 Things to Know | Asian Development Bank

Social Insurance in Asia and the Pacific: 12 Things to Know

Article | 27 March 2015

Social insurance is the main form of social protection in Asia and the Pacific, accounting for 59% of government's total spending.

  1. Social insurance is a form of social protection. It refers to contributory schemes that cushion the risks associated with unemployment, ill health, disability, work-related injury, and old age.
    Source: ADB Social Protection Strategy
  2. Social insurance is the predominant form of social protection in Asia and the Pacific. It accounted for 59% of government’s total social protection expenditures in 2009 and reached 37% of total beneficiaries.
    Source: The Social Protection Index: Assessing Results for Asia and the Pacific
  3. Very few poor households are able to gain access to contributory social insurance programs as they are mostly engaged in the informal sector. This creates large gaps in coverage between those employed in the formal sector and those working in the informal sector.
    Source: ADB Social Protection Operational Plan 2014-2020
  4. Pensions account for 65% of total social insurance expenditures and reach 45% of beneficiaries in developing Asia.
    Source: The Social Protection Index: Assessing Results for Asia and the Pacific
  5. Those in formal employment are more likely to enjoy pension coverage. Since informal workers account for a large share of the labor force in developing Asia, only 10%-15% of the region’s working-age population is part of a pension scheme.
    Source: ADB Social Protection Operational Plan 2014-2020
  6. Health insurance is the second largest component of social insurance. It demonstrates greater potential to cover a fairly large proportion of the population. While taking up only 13% of social insurance expenditures, it covers 35% of people in the region.
    Source: The Social Protection Index: Assessing Results for Asia and the Pacific
  7. Maternity leaves, severance pay, and withdrawals from provident funds are other forms of social insurance. Unemployment schemes remain uncommon in the region’s developing countries. The People’s Republic of China, Thailand, and Viet Nam have introduced different levels of unemployment benefit while Indonesia and the Philippines operate systems of severance pay.
    Source: ADB Social Protection Operational Plan 2014-2020
  8. Women benefit less from social insurance than other forms of social protection, despite the fact that some forms of social insurance, such as maternity benefits, directly target women. This is because of their lack of access to formal employment.
    Source: Gender Dimension of the Social Protection Index
  9. Social insurance is characterized by relatively large benefits per recipient compared to other forms of social protection. In the Pacific Islands, social insurance benefits represent 70% of gross domestic product (GDP) per capita. In South Asia, benefits are 39% of GDP per capita.
    Source: The Social Protection Index: Assessing Results for Asia and the Pacific
  10. The dominance of social insurance is most pronounced in high-income countries of East Asia and Southeast Asia. In Japan, health insurance covers the total population of over 127 million people. The Republic of Korea's health insurance system is similar in scope to Japan's. In Singapore and Malaysia, social insurance accounts for 93% of all social protection expenditures.
    Source: The Social Protection Index: Assessing Results for Asia and the Pacific
  11. The Republic of Korea’s National Health Insurance provides universal coverage. It is financed mainly by contributions from the insured and their employers, and subsidies from the government.
    Source:The Social Protection Index: Assessing Results for Asia and the Pacific
  12. In 2009, the People’s Republic of China launched the New Rural Pension Scheme to provide a minimum level of income security in old age and to encourage savings. Two years later, the Urban Social Pension Scheme was set up to provide a contributory retirement scheme to informal sector workers in cities.
    Source: ADB Social Protection Operational Plan 2014-2020