Insurer cites in-house rule as the main reason for 19pc drop in new business
Hong Kong's biggest insurer, American International Assurance (AIA), has paid a high price in terms of lost business for banning its agents from selling policies to mainland buyers.
The in-house rule, implemented in January to stamp out illegal poaching of cross-border business, was the main reason for a 19 per cent drop in new premium sales in the first half of the year, according to Jacky Chan Wing-sing, a vice-president and assistant general manager of the company.
'The new guidelines certainly affected morale within our sales team, and we have had agents leaving the company because of that,' said Mr Chan, who added that the number of agents employed by the company fell by 500 to 8,400 during the first half.
The comments came a day after the Office of the Commissioner of Insurance revealed that new premiums in force for the industry grew 4.7 per cent to $20.67 billion during the period.
The South China Morning Post reported in January that AIA, which has a market share of about 15 per cent in Hong Kong, had ordered employees to stop selling policies to mainlanders in an attempt to stop illegal sales activities by Hong Kong agents in the mainland. No other insurers have followed AIA's lead.