Hong Kong insurers should broaden horizons to tap opportunities in Greater Bay Area
- Hong Kong insurers need to be innovative and forge closer ties with the Greater Bay Area or risk losing out to Singapore and Shanghai, according to the Financial Services Development Council
- More needs to be done in terms of initiatives to enable Hong Kong companies to gain access to the mainland market, council says
Hong Kong needs to leverage its connection with the Greater Bay Area and develop more insurtech products to compete with regional cities such as Singapore or Shanghai as a life insurance hub, according to a report by the Financial Services Development Council (FSDC) released on Monday.
“Singapore has numerous initiatives to support the development of insurtech, such as heavily sponsoring the development of innovation centres and relevant start-ups. Hong Kong, in comparison, has fewer of such measures,” said Winnie Wong, a member of the FSDC.
Hong Kong life insurers also need to promote new technology to cut costs and enhance efficiency, the FSDC said in the report entitled “Enhancing Hong Kong’s Role as a Leading Life Insurance Centre”.
Hong Kong’s Insurance Authority launched a “sandbox” scheme in September 2017 to allow insurers to trial new technologies before gaining regulatory approval. HSBC, Manulife, Prudential, and AIA have all introduced electronic platforms to allow customers to process claims.
Insurers have also been developing technologies to detect fraud using artificial intelligence and blockchain, said a spokeswoman of the Hong Kong Federation of Insurers.
The FSDC also urged the insurance sector to capture opportunities in the Greater Bay Area ahead of competitors from Singapore and Shanghai.
The recent launch of the high-speed rail link and the Hong Kong-Zhuhai-Macau Bridge have enhanced connectivity between Hong Kong and the mainland. However, more needs to be done to ensure Hong Kong based insurers can access the mainland market, the report said.
“We have indeed seen some initiatives happening in Hong Kong, such as the government’s initiatives in setting up a Life Insurance Connect. However, we need to see an acceleration of these initiatives,” said Mark Saunders, leader of FSDC Life Insurance Working Group.
Under a proposal being considered in Beijing, Hong Kong-based life insurers may receive special permission to set up offices on the Chinese mainland to sell products. No details on the progress of the proposal, put forward by Insurance Authority chairman Moses Cheng Mo-chi, have been forthcoming.
The FSDC also hopes Hong Kong insurers will get a license to set up a joint venture or wholly-owned subsidiary to operate in the mainland.
The Greater Bay Area represents a population basin of about 70 million, compared to only 7 million in Hong Kong.
Mainlanders spent HK$11.79 billion (US$1.51 billion) on life and health insurance policies in Hong Kong during the third quarter, up 17 per cent on year, according to Insurance Authority data.