Insurers in Hong Kong have stepped up their recruitment efforts with mass hiring of insurance agents, as firms seek to grow local sales to make up for the loss of revenue from mainland Chinese visitors.
Data from the Insurance Authority showed that the number of insurance sales staff in Hong Kong was at a record high of 129,939 by the end of May.
While insurers’ income from mainland Chinese visitors had been tapering off over the past few years, COVID-19 restrictions have caused travel to come to a virtual standstill, further weakening a vital revenue stream for Hong Kong-based insurers. This resulted in new business from mainland Chinse visitors dropping by 98% for the first quarter of 2020.
In 2019, sales to mainlanders made up 25% of new life business in Hong Kong. This figure dwindled to just 0.3% for the first three months of this year.
However, local sales received a boost, with total sales of life insurance policies growing by 16% to HK$40.7 billion (SG$6.94 billion), thanks to increased hiring, especially of sales personnel. Sales of investment-linked life policies saw annual growth of 153% for the quarter.
According to Edward Moncreiffe, chairman of the Hong Kong Federation of Insurers, these developments show a healthy local insurance market.
“This shows there is still a lot of appetite from many Hongkongers to take control of their own investment decisions within the security of a long-term insurance policy,” Moncrieffe, who is also Hong Kong CEO of HSBC Life, told SCMP.
Once Hong Kong’s vaccination efforts start bearing fruit and cross-border travel becomes less of a hassle, Moncrieffe expects mainlanders to return to Hong Kong to buy insurance due to the market’s “best-in-class products and services.”
