As the number of mainland Chinese visitors to Hong Kong dwindled due to the political crisis gripping the city, insurers have turned to locals to make up for lost sales.
In the second half of 2019, many insurers shifted their focus to selling tax-deductible medical and retirement products to Hong Kongers, a report by the South China Morning Post said. Mainland Chinese visitors’ spending on life insurance policies dropped by around 29% to HK$9.7 billion (US$1.2 billion) during the third quarter of the year, from HK$13.6 billion in the previous quarter. Year-on-year, the decrease was around 17%.
Amid political unrest, the number of tourists from mainland China dropped by 55%, and this is one of the main reasons for the decrease in sales, as Hong Kong regulations require visitors from the mainland to be physically present to purchase insurance.
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“The overall insurance industry in Hong Kong reported strong growth in the first half of last year, but the situation turned around in the second half because of the social unrest that started in mid-2019,” Prudential Hong Kong CEO Derek Yung Kai-ming told SCMP.
“Luckily, we promoted the tax-deductible medical scheme, as well as the tax-deductible annuity product. Sales of these two types of products to Hong Kongers have been strong because of tax incentives.”
This move helped offset the losses caused by the lower number of tourists from mainland China, Yung said.
Meanwhile, Eric Hui Kam-kwai, CEO of Zurich Insurance (Hong Kong), praised insurance brokers for their quick adjustment to the situation. He said that brokers have begun selling more life, medical and other protection products to Hong Kong policyholders over the last six months.
“The brokers are very smart – they switched their sales strategy quickly,” the report quoted him as saying. “While they found there were fewer mainland visitors amid the protests, they started to sell other medical, savings and retirement products to Hong Kong policyholders.”
