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Overview
- Hong Kong has the second most developed insurance market in the region after Japan in term of per capita insurance premium. Being a leading insurance centre in Asia, Hong Kong has attracted many of the world's top insurance companies.
- Total gross premium in 2007 amounted to HK$197.3 billion (US$25.3 billion), representing 12.2% of the Hong Kong GDP. Over 87% of the market was comprised of long-term insurance business, while general business accounted for 12%.
- Taking advantage of a more liberal regional insurance market, many foreign insurers and reinsurers have expanded their operations in the region. China's accession to the World Trade Organisation (WTO) has also accelerated the process. A number of foreign insurers and reinsurers have expanded their regional operations in Hong Kong to cater for the development of the regional insurance market.
- In addition to the Chinese mainland's WTO liberalisation, Hong Kong's insurance sector and professionals can benefit from the CEPA agreement. The Chinese mainland recorded a 31% year-on-year growth in premiums written in 2007, making it the 10th largest insurance market globally.
Industry Data
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-
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Jun 2008
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Employment
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31,319
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Number of establishments
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7,752
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Source: Quarterly Report of Employment, Vacancies and Payroll Statistics, Census & Statistics Department
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Insurance Market
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2007
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Total premium income (US$ billion)
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25.3
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Long-term business
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22.2
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General business
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3.1
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Insurance penetration (premium income as % of GDP)
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12.2
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Insurance density (per capita expenditure, US$)
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3,652
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Source: Annual Report 2007, Office of the Commissioner of Insurance
Total gross premium grew by 26.4% in 2007 to HK$197.3 billion (US$25.3 billion) representing 12.2% of the Hong Kong GDP based on the data from the Office of the Commissioner of Insurance. General insurance business grew by 5.7% in 2007, and long-term insurance business grew by 30% during the same period. Long-term insurance business has maintained double-digit growth for the past decade, whereas general insurance business started an upward trend in 2006.
According to provisional statistics for the first three quarters of 2008, general business grew by 11.3% to HK$20.9 billion (US$2.7 billion). During the same period, long-term in-force business grew by 7.8%, whereas the statistics showed that the new long-term insurance business was steady with gross premiums to record a slight decline of 0.4%, amidst the deterioation of the financial market.
Service Providers
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Number of authorised insurers
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2006
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Total
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181
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Long-term insurance
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47
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General insurance
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116
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Composite
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18
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Source: Annual Report 2007, Office of the Commissioner of Insurance
As of December 2006, Hong Kong had 181 authorised insurers, about half of which were incorporated overseas. Among the overseas-incorporated insurers, the US and the UK took the lead.
According to a report from Insurance Information Institute, the top 6 leading players of non-life insurance include HSBC Insurance (Asia), American Home Assurance, Bank of China Group Insurance, Ming An Insurance (Hong Kong), QBE Hongkong & Shanghai Insurance and AXA General Insurance (Hong Kong), while the major life insurers include AIA (Bermuda), Manulife, HSBC Life, Prudential UK, AXA China (Bermuda) and Hang Seng Life.
Three large mainland insurers which have been listed in Hong Kong are China Life Insurance, Ping An Insurance of China and PICC Property and Casualty Company.
Exports
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2006 (US$ mn)
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Total exports of insurance services
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415
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Direct insurance (life and non-life)
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159
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Reinsurance
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133
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Others (agency/broking/consultancy/actuarial valuation/loss adjusting)
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123
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Contribution to services exports (%)
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0.6
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Source: Report on Hong Kong Trade in Services Statistics for 2006, Census & Statistics Department
Industry Development and Market Outlook
- Against the backdrop of a highly matured market, an ageing population and rising general affluence, many insurers are already venturing into retirement planning and wealth management to meet consumer demands.
- In line with the regional trend, multi-channel distribution for insurance products is growing in popularity. While insurance products are primarily distributed by insurance agents, bancassurance penetration (the distribution of insurance products by banks) has been growing rapidly.Asia, in particular China, continues to be viewed by global insurers and reinsurers as the region of opportunities. In addition to the Chinese mainland's WTO liberalisation, Hong Kong's insurance sector and professionals can benefit from the CEPA agreement signed with the Chinese mainland.
Closer Economic Partnership Arrangement between Hong Kong and the Mainland (CEPA)
- As of 30 November 2008, 4 insurance and insurance-related services companies had obtained Hong Kong Service Supplier (HKSS) certificates, out of 5 applications.
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Existing Regulations/WTO Commitments
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Access for Hong Kong under CEPA
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- Market access conditions for foreign insurance companies:
- Total assets of over US$5 billion;
- In operation for over 30 years;
- Has established a representative office on the mainland for over two years.
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- Hong Kong insurance companies are allowed to form groups through re-grouping and strategic mergers to enter the mainland market subject to the following market access conditions:
- Total assets of over US$5 billion;
- One of the Hong Kong insurance companies in the group has been in operation for over 30 years;
- One of the Hong Kong insurance companies in the group has established a representative office on the mainland for over two years.
- Effective from January 2008, Hong Kong insurance agency companies are allowed to set up wholly-owned enterprises on the mainland to provide insurance agency services for the mainland insurers subject to the following requirements:
- 1. The applicant should be a professional insurance agency in Hong Kong or Macau, with an experience of operating in insurance agency business for over 10 years;
- 2. The average annual business revenues for the past 3 years before application should exceed HK$500,000
- 3. The total assets as at the end of the year before application should exceed HK$500,000, and
- 4. The applicant should have no serious misconduct and record of disciplinary action, within 3 years before application.
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- The equity ratio of foreign insurance companies in a mainland insurance company may not exceed 10%.
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- The equity ratio of Hong Kong insurance companies in a mainland insurance company may not exceed 24.9%.
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- After obtaining the mainland's professional qualifications in actuarial science, foreign actuary needs to obtain approval from China Insurance Regulatory Commission to practise.
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- Hong Kong residents with Chinese citizenship who have obtained the mainland's professional qualifications in actuarial science are allowed to practise on the mainland without prior approval.
- Hong Kong residents who have obtained the mainland's insurance qualifications and are employed by a mainland insurance institution are allowed to engage in the relevant insurance business.
- Under Supplement IV to CEPA, Hong Kong was to establish an examination centre for the mainland qualifying examinations for insurance intermediaries. The Vocational Training Council (VTC) has been appointed to administer the examinations centre. With effect from April 2008, Hong Kong residents can enrol for those examinations held in Hong Kong.
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