Yahoo Finance Life insurance sales in Hong Kong surged in first quarter thanks to world record policy, soaring demand from mainland visitors
Life insurance sales in Hong Kong surged by 39 per cent in the first quarter thanks to a world record policy sold by HSBC Life and strong growth in the number of mainland Chinese visitors buying policies in the city, according to data from the industry regulator.
New life insurance sales in the first three months rose to HK$65.3 billion (US$8.4 billion) from HK$47 billion a year earlier.
Sales of policies to mainland visitors amounted to HK$15.63 billion, the Insurance Authority figures showed, a big jump from HK$9.61 billion a year earlier.
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That is higher than the pre-Covid levels. Mainlanders bought HK$12.8 billion of life and medical policies in the first quarter of 2019, representing 26.4 per cent of the total.
HSBC Life issued the world's most valuable life insurance policy with a protection value of US$250 million, which was certified by Guinness World Records in February. The sale, though its premium was not disclosed, was a major boost to the total sales of new life insurance.
The jumbo policy, along with a hike in sales of insurance products to wealthy customers, helped the insurer to achieve 67 per cent year-on-year growth in new business premiums to HK$16.7 billion in the January-to-March period. This helped HSBC Life to maintain its position as the top life insurer in Hong Kong in terms of new sales.
"We recorded pronounced growth in our bancassurance channel," said Daisy Tsang, interim CEO for Hong Kong and Macau at HSBC Life. "With the ever-increasing demand for more and better insurance solutions, our diverse product offerings, strong distribution channels, and commitment to serving our customer's holistic needs will continue to provide the platform for HSBC Life to thrive further."
Other leading players such as AIA Group, Manulife and Prudential also saw robust sales growth driven mainly by policies being snapped up by mainland visitors.
In the first three months, some 11.2 million travellers visited the city, including 8.7 million from the mainland, according to the Hong Kong Tourism Board. Both numbers were up more than 150 per cent from a year earlier.
Mainland Chinese tourists last year spent HK$59 billion on life and medical insurance policies in Hong Kong, higher than the level recorded between 2017 and 2019 of HK$43 billion to HK$51 billion.
"As Hong Kong continued its economic growth and welcomed a growing number of visitors in the first quarter, we are delighted to report strong business growth during the period," said Patrick Graham, CEO of Manulife Hong Kong and Macau.
He also credited Manulife's expansion of its product portfolio and sales channels during the quarter.
"We are cautiously optimistic about the growth opportunities ahead driven by the continued influx of visitors, benefiting from the recent expansion of the Individual Visit Scheme and the government's plans to host more mega events in the second half of the year," Graham added.
The Individual Visit Scheme, implemented in 2003 to allow solo tourists to visit Hong Kong, was recently expanded to cover more mainland cities.
The increase in visitors also drove up demand for travel insurance, sending new premiums for accident and health insurance up 12.4 per cent to HK$6.9 billion, the data showed.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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