Mainland Chinese consumers are helping to boost the sale of the coverage through cross border shopping.
Visitors from mainland China have been helping to increase the success of the life insurance industry in Hong Kong as they have been buying policies at a rate that is returning the sector nearly to the level that it had reached before the global economic crisis began.
New premiums for the policies are helping to boost the appeal of the coverage, leading to considerable recovery.
The newly created premiums for life insurance being sold in Hong Kong are being credited with helping to bring the industry back to the figures that are almost where they were before the financial crisis began. Mainland visitors are also playing a very important role in this recovery, as Chinese consumers purchase coverage over the border.
An estimated 12.8 percent of life insurance policies sold in Hong Kong last year were to mainland buyers.
When compared to the figures from 2011, this figure has increased by 9 percent. Moreover, this is the first time that the contribution to life insurance purchases from mainland Chinese consumers has reached double digit levels.
The premiums paid for the life insurance coverage purchased by consumers from mainland China increased to HK$9.9 billion in 2012, which was a rise of 57.1 percent. This is according to the most recent figures from the Office of the Commissioner of Insurance. Not including the retirement plans, the new premiums for those policies increased to HK$77.8 billion, a rise of 10.4 percent. This figure represents the highest level that the industry has seen since 2007.
A legislator representing the insurance sector, Chan Kin-por, stated that at the moment, it is the traditional products that are dominating in sales. Previously, the policies linked to investments, that is, those allowing buyers to select the type of investment funds into which the premiums would be placed, had been the most popular. However, that has changed since the financial crisis.
The new premiums paid for traditional life insurance policies in 2012 increased by 22.1 percent in order to reach HK$60.3 billion. Those linked to investments dropped by 17.7 percent to reach $17.1 billion.