Manulife's new Macau office will help insurer tap Greater Bay Area opportunities, CEO says

Manulife, the largest insurer in Canada and the largest pension provider in Hong Kong, will move to a new office in Macau in October to support its expansion in the former Portuguese colony.

The company has leased 64,000 sq ft of office space in the grade A Yoho Treasure Island complex on Macau peninsula. Named after the adventure novel by Scottish author Robert Louis Stevenson, the mixed-use complex faces Nam Van Lake and includes a five-star hotel and shopping centre.

"Even though Macau's population is roughly only 10 per cent of Hong Kong's, the insurance penetration rate in Macau is half of that in Hong Kong," Patrick Graham, the insurer's Hong Kong and Macau CEO, said in an exclusive interview with the Post. "But the demand for life insurance is attractive in Macau."

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Manulife joins a slew of financial firms expanding in the gaming hub.

OCBC last month said it will spend HK$1.5 billion (US$192 million) over the next three years to upgrade its Hong Kong and Macau digital platforms, offices and branches. Southeast Asia's largest bank sells policies of its insurance partners through its 11 branches in Macau.

UK-headquartered Prudential set up its first office in Macau in July last year, while HSBC Life opened its first wealth management centre in Macau a month later.

Manulife will move to its new office in the Yoho Treasure Island complex in Macau in October. Photo: Handout alt=Manulife will move to its new office in the Yoho Treasure Island complex in Macau in October. Photo: Handout>

Graham said the new office will consolidate its many small offices in Macau. It will accommodate about 1,000 agents, employees and a training facility, allowing it to double its client-serving capacity.

Financial firms are doubling down on Macau following the government's launch of the "1+4" development strategy last year, which aims to diversify the casino-dependent economy to four other sectors, namely healthcare, financial services, technology, and conventions and exhibitions.

"The Macau government's policy support to diversify the economy is really powerful, and it gives us a lot of confidence to invest for the long term," Graham said.

Manulife has operated in Macau since 1996. It started with a small operation but expanded in 2020 in the midst of the Covid-19 pandemic.

Back then, the border between Hong Kong and mainland China was closed because of the pandemic, preventing mainland visitors from travelling to Hong Kong to buy policies. They instead travelled to Macau to buy insurance as its border remained open with the mainland.

After the border reopened between Hong Kong and the mainland last year, Macau's role faded slightly.

Sales of new insurance policies in Macau last year dropped 1.2 per cent to 33.7 billion patacas (US$4.2 billion), but were still 3.6 per cent higher than 2021 when they surged 26 per cent from a year earlier amid the pandemic, according to data from the Monetary Authority of Macau.

"We decided to continue to expand in Macau even though sales declined last year because we take a long-term view of our investment that lasts decades and not just a few years," Graham said.

"We believe both Hong Kong and Macau will serve as gateways to the Greater Bay Area and rest of China."

Beijing rolled out the Greater Bay Area blueprint in February 2019 to integrate Hong Kong, Macau and nine mainland cities into an economic powerhouse.

Graham said the low penetration rate for insurance in Macau and the Greater Bay Area provides scope for growth because of an ageing population and a growing middle-class demanding protection and wealth management.

Macau has a 9 per cent penetration rate, while it is 4 per cent in Greater Bay Area cities and nearly 18 per cent in Hong Kong.

Macau, which relies on gaming, has a modest financial sector, with only three securities intermediaries, 27 insurers and 33 lenders. In contrast, Hong Kong has about 600 stockbrokers, 160 insurance companies and 164 banks.

The challenge for financial firms to expand in Macau is availability of talent, according to Graham.

"Macau's small population means it is hard to recruit agents," he said. "There is a lot of talent in the gaming industry, but they are reluctant to switch careers."

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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