The return of Chinese tourists, the establishment of ‘insurance linking’ ‘big opportunities’ for Hong Kong insurers

The return of mainland tourists to Hong Kong and the introduction of a long-awaited “connectivity insurance” scheme in the Greater Bay Area will bring. great business opportunity of the city’s insurance companies, according to regulators and industry players.

“Hong Kong recovery after an epidemic it should not be seen as a distant and uncertain dream but as a hope that should bring confidence, hope and more investment from the business,” said Damien Green, Asia President and CEO of Manulife, one of the largest business insurance companies.

“The time has come for companies to show hope for the future of the city. Let’s start the next 25 years under the One Country, Two Systems plan with great hope.”

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Hong Kong can provide insurance information for the 80 million people living in the bay area, Green said at the 2022 SCMP China Conference on Wednesday.

When Manulife surveyed more than 1,600 Chinese people last year, it found that most wanted to travel to Hong Kong when the border reopened, while more than half wanted to buy insurance here, Green said.

“Insurance penetration within the Greater Bay Area (GBA) is low at 5.5 percent compared to about 21 percent in Hong Kong,” he said. “We fully expect that the integration of GBA will increase the number and speed of mainland tourists in Hong Kong who are looking for ways to protect themselves financially.”

The The Bay area is a booming area designed by Beijing that aims to promote trade and investment between 11 cities in southern China to create an economic zone similar to the US and Japan.

Mainland Chinese were the biggest spenders on Hong Kong insurance before the outbreak caused a surge in cross-border traffic over the past two years. At its peak in 2016, it bought policies worth HK$72.68 billion, representing 39 percent of the total revenue collected in the city.

Border closures to contain the Covid-19 pandemic reduce the number of foreign tourists and 98 percent to 65,921 last year, according to the Hong Kong Tourism Board. Therefore, they only spent HK$688 million on life and medical insurance in Hong Kong in 2021, representing only 0.4 percent of the total, according to research from the Insurance Authority.

Insurance Authority chief executive Clement Cheung Wan-ching said Hong Kong insurers should prepare their products to attract mainland tourists. He added that in 2019, before the outbreak, 25 percent of the city’s new revenue came from Chinese tourists.

“If we create insurance, we should make it for customers in Hong Kong and neighboring cities,” Cheung said during the conference.

In addition, with many Hong Kong residents planning to move to work and live in the bay area in the coming years, insurance companies and regulators must find solutions that allow customers to purchase only one policy to meet all their insurance needs – car, walking. , medical cover and goods – in various areas in the main economic area, Cheung said.

A plan to “connect insurance” to allow Hong Kong insurers to set up after-sales centers to serve customers living in the bay area will be an important initiative, Cheung said. He said that he has been working with the top officials on the plan.

“With the successful launch of the Wealth Management Connect system last year, we believe that insurance connectivity will also improve,” he said.

Over the past 25 years, since it returned to Chinese rule, the city has come a long way in expanding its insurance industry, with 160 insurance companies established here.

Total insurance premiums last year reached HK$600 billion, which is 11 times the amount in 1997, according to the Insurance Authority. The number of sellers on the market has quadrupled to 120,000 now.

Manulife, founded in Hong Kong 125 years ago, is the city’s largest life and pension insurer, with its Asian headquarters overseeing 13 markets in the region and more than 13 million customers.

“We are proud that Hong Kong is our Asian capital. We are matching our mission with action and investment as we expand our ambitions in Hong Kong, the Greater Bay Area and the rest of Asia,” said Green.

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