On February 20, the Hong Kong Insurance Authority announced the insurance industry data for 2023, in which the new policy premium of individual life insurance for mainland visitors was about HK $59 billion, a year-on-year increase of more than 27 times, exceeding the pre-epidemic level in 2019, second only to the record peak of HK $72.7 billion in 2016, but falling in the third and fourth quarters month-on-month.
The premium for mainland visitors is $59 billion
In 2023, the new policy premiums of individual life insurance for Mainland visitors will be about HK$59 billion, soaring by more than 27 times year-on-year, and will decline in the third and fourth quarters.
Savings insurance accounts for 60%.
Protection insurance accounts for 40%.
Unlike in the past, where protection insurance accounted for 60% and savings insurance accounted for 40%, savings and protection accounted for 60% and 40% of the policies purchased by Mainland visitors in 2023Analysis by the Hong Kong Insurance AuthorityThis was due to the divergence in interest rates between China and the United States, as well as the fact that the renminbi fell to 7 against the US dollar at one point3 levels, which increases the attractiveness of the dollar policy.
Participating savings insurance products in Hong Kong have the advantages of high yield, high adaptability and strong functionality, and have strong product competitiveness. From the perspective of yield, the medium and long-term expected rate of return of dividend savings insurance products in Hong Kong can reach an annualized level of about 6%, and the fulfillment rate of dividends in recent years is close to 100%, with a high rate of return.
Judging from the data in the first half of last year, the average unit premium of mainland visitors has increased significantly, with the average unit premium exceeding HK$200,000, which is twice that of the same period in 2019 before the epidemic. From the perspective of the most purchased whole life insurance, the average premium has reached 51HK$780,000.
About 25% of the sum insured in the Mainland
Use premium financing
The data shows that premium financing activity has slowed significantly last year. The proportion of new premiums increased from 43%** in 2022 to 21% in 2023, and fell to the lowest level in a single quarter in years in the fourth quarter of 2023 to 9%, reflecting the cautious attitude of policyholders towards premium financing in a high-interest rate environment. StillIn the first three quarters of last year, about 25% of the new business of Mainland customers involved premium financing.
Premium financing is when a customer borrows money from a financial institution to purchase an insurance policy, and the policy is treated as collateral. When the policy return is higher than the interest cost of the loan, the customer can earn the interest rate difference in addition to the protection of the insurance.
*: Hong Kong Journal.
It's just a cumulative demand release
It is not a trip to the mainland
If last year's HK$59 billion is divided over four years, that is, about HK$15 billion per year, there is still a certain distance from the normal level of HK$43 billion to HK$50 billion from 2017 to 2019. Moreover, one-quarter of the new policy premiums last year were related to premium financing, that is, the actual amount of funds involved in the Mainland was only more than HK$40 billion.
In 2024, it is expected to maintain a normal level of more than 40 billion
Zhang Yunzheng said frankly that it is difficult to estimate whether this year's related business can reach the scale of last year, if there are no significant fluctuations in interest rates and exchange rates between China and the United StatesThis year, new office premiums for Mainland visitors are likely to remain at least at the normal level of over $40 billion.
Although there was a sharp spike in the first two quarters of 2023 when mainland visitors came to Hong Kong for insurance, Cheung mentioned that the third and fourth quarters of last year had fallen quarter-on-quarter, with new office premiums in the third quarter exceeding 32% quarter-on-quarter**, and continuing to decline in the fourth quarter, albeit at a smaller rate than in the third quarter, which is believed to be due to the recovery of the renminbi during the period.
Looking forward to the situation of mainland visitors coming to Hong Kong to apply for insurance this year, he pointed out that there is still natural demand, but it is difficult to estimate whether it can reach the scale of 59 billion yuan last year, and if the interest rate and exchange rate trend between China and the United States do not fluctuate significantly at the current level, it will not be difficult to reach 40 billion yuan to 50 billion yuan.
The Bay Area Service Center plan has been submitted
Regarding Hong Kong's efforts to set up insurance after-sales service centers in the Greater Bay Area for many years, Yao Jianhua, chairman of the Insurance Authority, said that he communicated with the mainland regulatory authorities in August last year and learned that the plan had been submitted
Asked about the State Administration of Financial Regulation's earlier reply to the proposal of the CPPCC members, indicating that the time is not ripe for the pilot of the "Cross-boundary Insurance Connect", Zhang Yunzheng believes that the mainland insurance market is still in the process of consolidation and adjustment, and it is difficult to open up the market on a large scale for the time being when "the body has not yet adjusted", and most Hong Kong insurance companies have branches and joint ventures in the mainland.
He also said that the mainland is not completely opposed to "Insurance Connect", for example, the "equivalent first recognition" product of Hong Kong cars going north can be regarded as one of them. Cross-boundary Insurance Connect (IAT) allows Hong Kong and Macao insurance companies to sell insurance products directly to Mainland residents without the need to set up branches in the Mainland.
Edit |Susu.
Editor | leyla