If you are worried about the demand in the insurance sector, you can put your mind at ease.
Local Market
In Hong Kong, the ratio of insurance policies to population is just under 2, which means that on average every individual has two policies. Compare this to countries with top performance in life insurance, such as the USA, where the ratio is around 4 (i.e., every residence typically has four policies). And in Japan, the number is even reaching 6. We believe that the Hong Kong market still has a great potential to grow.
Also, the increasing education levels and the impetus given by the government and industry have huge impacts on rising life expectancy. The public is coming to understand the importance of financial planning. On the other hand, the rise in daily expenses, educational and medical expenses, and the aging of the population have formed concerns in society. Citizens can no longer rely solely on social welfare to fulfill the needs of retirement and medical treatments. Therefore, the government has recently promoted the Voluntary Health Insurance Scheme, Qualifying Deferred Annuity Policy (QDAP), and Voluntary Contributions / Tax Deductible Voluntary Contributions (TVC), encouraging comprehensive financial plans via commercial insurance.
Meanwhile, the number of wealthy families is increasing. According to a recent study called “Hong Kong Affluent Study 2020,” one out of every 12 people living in the city is a multimillionaire, accounting for 8.7 percent of the population. Rich people tend to desire asset management and have a financial growth mindset to protect their wealth and pass on a lasting legacy. Insurance companies can provide suitable products with professional knowledge to support the needs of these clients.
Mainland Market
China’s economy is now the world’s second-largest. The significant improvements in access to economic well-being and higher living standards have suggested a shift toward high-value consumption. That includes insurance products and financial planning services. When life is becoming better, people start to invest in themselves. At the same time, the global pandemic has demonstrated the practical value of insurance products. Therefore, insurers are ready to buckle up to accelerate growth now and in the future.
