Return of mainland Chinese visitors, launch of ‘insurance connect’ a ‘huge opportunity’ for Hong Kong insurers
- ‘Time has now arrived for the corporate sector to show optimism in the future of the city,’ Manulife’s Damien Green tells SCMP China Conference
- Insurance Authority CEO Clement Cheung says Hong Kong insurers need to prepare their products for return of mainland visitors
“The time has now arrived for the corporate sector to show optimism in the future of the city. Let’s kick off the next 25 years under the One Country, Two Systems framework with great optimism.”
When Manulife surveyed more than 1,600 mainland Chinese residents last year, it found the vast majority planned to visit Hong Kong when the border reopens, while more than half intend to purchase insurance products here, Green said.
“Insurance penetration within the Greater Bay Area (GBA) is low at only 5.5 per cent compared to almost 21 per cent in Hong Kong,” he said. “We fully expect that the GBA integration will exponentially increase the volume and velocity of mainland visitors to Hong Kong who are seeking personal financial protection solutions.”
Mainland Chinese were the biggest spenders on Hong Kong insurance policies before the pandemic brought cross-border traffic to a standstill over the past two years. At the peak in 2016, they bought HK$72.68 billion worth of policies, representing 39 per cent of all premiums collected in the city.
Insurance Authority CEO Clement Cheung Wan-ching said Hong Kong insurers need to prepare their products for the return of mainland visitors. He pointed out that in 2019, before the pandemic, 25 per cent of the city’s new premiums came from mainland Chinese visitors.
“When we design insurance product, we need to design them for Hong Kong customers and also for our neighbour’s cities,” Cheung said in a panel discussion at the conference.
In addition, with more Hong Kong people planning to go to work and live in the bay area in the coming years, insurance companies and regulators need to find solutions that allow customers to buy only one policy to cover all their insurance needs – motor, travel, medical and property cover – in different places within the giant economic zone, Cheung said.
The planned ‘insurance connect’ scheme allowing Hong Kong insurers to set up after-sales service centres to serve customers living in the bay area, will therefore be an important project, Cheung said. He said he has been working with mainland authorities on the plan.
“With the smooth introduction of the Wealth Management Connect scheme last year, we believe the insurance connect will also be a success,” he said.
Over the last 25 years, since its return to Chinese rule, the city has come a long way in terms of developing its insurance industry, with 160 insurance companies setting up here.
Total gross premiums last year came to HK$600 billion, which is 11 times the figure in 1997, Insurance Authority data shows. The number of salespeople in the industry has risen four times to over 120,000 now.
Manulife, which was set up in Hong Kong 125 years ago, is the largest life insurance and pensions provider in the city, where its Asian headquarters oversees 13 markets in the region with over 13 million customers.
“We’re proud that Hong Kong is our Asia headquarters. We’re matching our intent with action and investment as we intensify our ambitions in Hong Kong, the Greater Bay Area and across the Asia region,” Green said.