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Hong Kong Insurance Report Q3 2011
Business Monitor International, June 2011, Pages: 81
Business Monitor International's Hong Kong Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Hong Kong's insurance industry.
Even though life density exceeds US$3,000 per capita, Hong Kong’s life segment continues to boom. There is no reason why this cannot continue.
- Thanks partly to the discipline shown by the major companies, non-life penetration has risen steadily over the last six years or so. There is also no reason why this cannot continue.
- By far the most important risk is volatility in Chinese financial markets (and, by extension, those of Hong Kong) that causes investor sentiment to sour. The experience of the global financial crisis is that this would likely cause life density to fall but not plummet.
Hong Kong’s insurance sector remains one of the strongest and most dynamic of any that is surveyed by BMI. This is not just because the protagonists include virtually every major global and regional multinational, nor just because the regulatory regime presided over by the Office of the Commissioner of Insurance (OCI) is first class. It is not just because the special administrative region (SAR) remains the premier regional business centre for Greater China (or, as some of Hong Kong’s supporters might argue, the entire Asia Pacific region), or because of the thrift of its inhabitants.
The latest figures published by the regulator and the leading insurance companies show that non-life penetration continues to grow. Even though Hong Kong residents need far less car insurance than people in most other countries, and the market is competitive, non-life insurers have continuously identified new market opportunities, with the result that premiums have expanded faster than nominal GDP. Health insurance is expanding, partly due to Hong Kong’s demographics (ie: an ageing population). New regulations have compelled the owners’ corporations of apartments to take out liability cover. The marine insurers are looking for new opportunities from the further development of Hong Kong as a trading port.
Life insurance is seen as a very attractive channel for organised savings. New and renewal premiums have been growing at rates well into double digits. This is partly a reflection of investor confidence. It is also testament to the inventiveness of the life insurers in two ways: the development of attractive new products and the promotion of efficiency in distribution, particularly, but not only, through banks via bancassurance arrangements and through agents.
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