New insurance premiums for policies issued in Hong Kong to mainland Chinese visitors have plunged to a two-year low, data released by the Insurance Authority (IA) show.
The new premiums stood at HK$10.1 billion (US$1.29 billion) in the third quarter this year, representing a year-on-year decline of 46%, the regulator said. The business has been declining since the fourth quarter in 2016 when China curbed mainland residents buying insurance overseas. The restriction did not immediately cause any drop in new premiums for policies issued to mainlanders in the fourth quarter last year which saw premiums from new sales of HK$23.7 billion.
In October 2016, China’s biggest bank card provider UnionPay said that it would not allow mainland cardholders to buy “any insurance product, including those serving as investments, in Hong Kong.” At the beginning of 2017, the State Administration of Foreign Exchange tightened its curbs and required reports on large foreign currency transactions by individuals.
Ms Carol Hui Mei-ying, IA executive director for long-term business, said that measures governing mainland capital inflows and outflows have led insurers to adjust their sales strategies, causing a decline in premiums.
Mainland visitors bought HK$3.5 billion in investment-related insurance in the third quarter of 2017, of which HK$9 billion was universal life insurance policies. As for the outlook, sales of medical or protective types of policies to mainland visitors will remain steady, while sales of investment-related insurance are expected to decline further in the near future, Ms Hui added.
Total gross premiums of the Hong Kong insurance industry in the first three quarters of 2017 amounted to HK$363.2 billion, representing an increase of 11% over the corresponding period last year.