“The opening of the Hong Kong and mainland China border has certainly been a key driver of sales growth in the first quarter this year,” said Edward Moncreiffe, CEO for Hong Kong and Macau at HSBC Life. “We have seen strong pent-up demand from mainland visitors and Hongkongers for our health and wealth solutions.”

27:15

274 million Chinese take a holiday: why ‘golden week’ 2023 was different

274 million Chinese take a holiday: why ‘golden week’ 2023 was different

HSBC Life was the top ranked insurer in the first quarter, with a market share of 21.7 per cent.

“As investment returns and asset prices globally continue to be challenged by higher interest rates, we expect to see continued strong demand for secure-return and low-maintenance insurance products through the rest of the year,” Moncreiffe said, adding that sales have already surpassed pre-pandemic levels in 2019.

The return of mainland buyers helped to drive overall new life insurance sales, which rose 10.7 per cent year on year in the first quarter to HK$47 billion. This was 2.9 per cent lower than the first quarter of 2019 when overall sales stood at HK$48.4 billion.

Mainland Chinese visitors, the biggest spenders on Hong Kong insurance policies before the pandemic brought cross-border travel to a standstill for the past three years, started to return to the city to buy products in the fourth quarter.

They spent only HK$2.1 billion, or 1.5 per cent of the total, on life and medical insurance policies in Hong Kong in 2022 as a whole, the data showed. Though this eclipsed the amount in 2021, it was still far short of the HK$43.4 billion in 2019, the last year before the pandemic.

According to the Hong Kong Tourism Board, the number of visitors in the first quarter rose by 383 times to 4.41 million. For the whole of last year, 604,564 people visited the city – a fraction of the 55.9 million tourists in 2019.

“We see a strong rebound in the local economy and a significant return of mainland Chinese visitors following the reopening of borders in the first quarter of 2023,” said Patrick Graham, CEO of Manulife for Hong Kong and Macau.

Manulife reported annualised premium sales growth of 26 per cent, while sales of critical illness plans and tax-deductible annuity schemes rose 40 per cent, respectively.

“As the economy continues on a path to recovery, we anticipate a growing interest in health and protection products from both domestic and mainland customers,” Graham said.

The reopening of the border also drove growth of travel insurance.

Blue Cross, part of AIA Group, saw its travel insurance sales in the first quarter jump eight-fold from a year earlier, according to CEO Bonnie Tse.

“The demand for travel insurance is set to continue to grow for the rest of the year as many business activities have resumed to normal,” she said. “The other general insurance businesses such as motor and medical are also on a rising trend.”

John Zhu Yat-ping, the chief economist for Asia at Swiss Re Institute, said the strong growth in Hong Kong insurance sales during the first quarter was consistent with the economic recovery driven by spending on services on the mainland.

“We expect both forces to remain in the second half, though with slightly slower sequential momentum,” Zhu said, adding that total sales this year may not return to 2019 levels as it will take time for businesses to fully recover.