Golden week visitors add insurance to the shopping list
Golden week tourists add insurance to the shopping list, skirting a ban on direct sales by HK agents across the border, but sector is hungry for more
Besides gold jewellery, baby milk powder, cosmetic products and luxury flats, it seems life insurance policies are now on the shopping list of cashed-up mainland tourists when they visit Hong Kong for the golden week holiday.
Insurance legislator Chan Kin-por said premiums paid by mainland customers represented 12.8 per cent of total new life insurance policy sales in Hong Kong last year, up from 9 per cent in 2011 and only 4 per cent before that.
"Many mainlanders have put life insurance policies on their shopping list, along with cosmetic products, gold jewellery and baby milk, when they travel to Hong Kong," Chan said. "Mainland customers are now the major driving force behind the growth in Hong Kong life insurance sales.
"Many top sales agents in Hong Kong are migrants from the mainland who sell policies to their mainland friends travelling to Hong Kong."
Mainland regulations ban Hong Kong insurance agents from selling or approaching clients on the mainland, but mainlanders are allowed to buy insurance policies here.
"Many insurance companies are targeting mainland customers and the golden week holiday is an important sales period," Chan said.
He said mainlanders were interested in buying policies in Hong Kong because the city's insurance companies were internationally linked and offered various types of policies with a lot more investment choices and flexible terms and conditions.
In contrast, policies sold on the mainland are highly regulated and provide little choice for customers.
However, it appears only life insurance companies are benefiting from the influx of mainlanders buying policies in Hong Kong.
Bernard Chan, the president of general insurer Asia Financial Group, said those who bought life policies in Hong Kong could receive compensation for their family in case of death or when the policies expired.
However, general insurance works differently.
Policies bought in Hong Kong cannot cover cars, property or machines on the mainland, which according to mainland law, can be covered only by mainland insurance companies.
Bernard Chan said the hope now lay with the mainland government to offer some special treatment to Hong Kong general insurers if they set up in the Qianhai experimental zone.
Qianhai, which is a 15-square-kilometre development next to Shenzhen and about an hour's drive from Hong Kong, is a testing ground for economic liberalisation on the mainland.
The zone has special policies to attract international firms to set up offices there.
In January, 15 international banks were allowed to offer a combined 2 billion yuan (HK$2.5 billion) in loans in Qianhai.
"If the mainland government would allow Hong Kong general insurers to set up an office in Qianhai and to provide cover in Guangdong province or nationwide, that would help boost the Hong Kong general insurance sector," Bernard Chan said.
But he said that so far, the Qianhai project authorities had made no announcement about the insurance sector, so the government needed to continue lobbying on its behalf.