Fearing further yuan weakness, mainland Chinese are buying insurance policies in Hong Kong once again
In first half of 2018, mainlanders spent HK$22.3 billion on insurance policies in the city
Mainland Chinese customers are once again buying more life insurance policies in Hong Kong, according to data released by the Insurance Authority on Friday, amid concerns the yuan might decline further.
China’s yuan has tumbled by more than 6 per cent over the past three months, making it the worst performer among currencies in Asia.
“The yuan has been weakening since June as a result of the trade war between the US and mainland China. This has contributed to mainlanders buying policies in Hong Kong,” said Chan Pui-leung, chairman of the Hong Kong Federation of Insurers.
“This trend of mainlanders buying Hong Kong insurance is likely to continue in the second half of this year, as the yuan is likely to continue being volatile due to the ongoing trade war. The stock markets in both the mainland and Hong Kong have also been volatile, which will again lead to mainlanders buying insurance policies as these carry lower risks than other types of investment,” said Chan.
In the first quarter, which witnessed a record decline, mainlanders spent HK$11.83 billion on life insurance policies in Hong Kong, down by 37 per cent from the HK18.8 billion spent a year earlier. In the April to June quarter, the rate of decline slowed down, with mainlanders spending HK$10.5 billion on life insurance policies in the city, which represented a 10 per cent drop from the HK$11.62 billion spent a year ago.