Covid-19 is spurring youthful Hongkongers to purchase extra insurance coverage safety

Extra folks in Hong Kong are shopping for insurance coverage protection from a youthful age, because the Covid-19 pandemic and wider entry to on-line monetary services assist push gross sales of recent insurance policies within the metropolis.

The common age for Hongkongers shopping for annuity merchandise, a kind of pension plan bought by insurers, dropped to 40 as of December from 47 in 2019, based on knowledge revealed by the Insurance coverage Authority. Hong Kong issued first of 5 on-line insurance coverage licences in December 2019.

“It’s an encouraging signal,” mentioned Carol Hui, govt director of long-term enterprise on the Insurance coverage Authority. “We are going to proceed to spur extra youthful folks to purchase merchandise that provide safety for his or her households and their very own retirement wants.”

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Individuals crossing the road at Central, Hong Kong on December 5. 2021. Photograph: Felix Wong alt=Individuals crossing the road at Central, Hong Kong on December 5. 2021. Photograph: Felix Wong>

The trade has embraced superior applied sciences to assist enhance protection, with 5 digital insurers competing with conventional giants in reaching out to extra Hongkongers via the web, as prospects turned extra tech-savvy throughout the pandemic.

Hong Kong faces a mortality safety hole of HK$6.9 trillion (US$884.6 billion) or HK$1.9 million per individual, exposing many households to monetary troubles within the occasion of the dying of the breadwinner, the Insurance coverage Authority mentioned in a examine revealed in September.

For its half, the Insurance coverage Authority has loosened a rule to assist grease gross sales throughout the pandemic. Since February 2020, brokers from conventional insurers haven’t been required to strictly conduct their gross sales via face-to-face conferences, given the social distancing guidelines and efforts to comprise the virus.

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“The pandemic has helped encourage extra folks to purchase insurance coverage merchandise on-line,” mentioned Charles Hung, CEO of Blue, one of many 5 permitted on-line insurers. “That is prone to be the long-term pattern even after the outbreak is over.”

Hung mentioned on-line insurance coverage corporations have invested in expertise to introduce extra progressive merchandise and pace up declare processes within the trade, whereas additionally serving to prospects trim prices.

At Bowtie Insurance coverage, about 40 per cent of medical insurance coverage policyholders are under 30 years outdated, mentioned Fred Ngan Yiu-fai, the net insurer’s co-founder and co-CEO.

“Greater than half of our prospects are first-time insurance coverage consumers, which implies Bowtie efficiently appeals to an underserved market of millennials,” he mentioned.

Purchases by youthful prospects contributed to a 24 per cent year-on-year development within the sale of recent life insurance coverage insurance policies amounting to HK$122.5 billion within the first 9 months of 2021, based on trade knowledge.

Edward Moncreiffe, chairman of the Hong Kong Federation of Insurers. Photograph: Xiaomei Chen alt=Edward Moncreiffe, chairman of the Hong Kong Federation of Insurers. Photograph: Xiaomei Chen>

They partly compensated for the large lack of enterprise from mainland Chinese language prospects because of the border shutdown. They purchased solely HK$470 million of recent insurance policies throughout the January-to-September interval, a 93 per cent stoop from the identical interval in 2020. Their share was solely 0.4 per cent versus 40 per cent on the peak in 2016.

Youthful prospects are additionally shopping for extra insurance policies at Prudential Hong Kong, its CEO Derek Yung mentioned. The pandemic, in addition to authorities assist, has given gross sales an impetus and the pattern is prone to proceed, he added.

Edward Moncreiffe, chairman of the Hong Kong Federation of Insurers, an trade physique representing 138 native insurers, was cautiously optimistic in regards to the outlook for 2022, as folks change into extra conscious that their long-term financial savings are inadequate to tide over any main emergency.

“With the anticipated opening up of the border with the Higher Bay Space, we expect to see the revival of some traces of enterprise,” he mentioned. “We nonetheless see rising demand from Hongkongers to shut their safety gaps.”

This text initially appeared within the South China Morning Submit (SCMP), essentially the most authoritative voice reporting on China and Asia for greater than a century. For extra SCMP tales, please discover the SCMP app or go to the SCMP’s Fb and Twitter pages. Copyright © 2022 South China Morning Submit Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Submit Publishers Ltd. All rights reserved.

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