Mainland Chinese spending on Hong Kong life insurance policies sinks 82 per cent as Covid-19 travel curbs bite

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Uploaded: 2020-12-01T02:00:19.000Z
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Mainlanders spent US$833 million on life and annuity policies in Hong Kong between January and September

Sales of life and annuity premiums in the local Hong Kong market fared much better, falling only 11 per cent to HK$84 billion

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A lack of Chinese tourists visiting Hong Kong has hit sales of insurance policies. Photo: Sam Tsang

Eric Ng

Published: 10:00am, 1 Dec 2020Updated: 11:00pm, 1 Dec 2020

The slump in Chinese mainlanders’ spending on life insurance products in Hong Kong deepened in the first nine months of the year, as the Covid-19 pandemic severely curtailed the number of people crossing the border.

Mainlanders spent a total of HK$6.5 billion (US$833 million) on life and annuity policies in Hong Kong between January and September, an 82 per cent decline from the same period a year ago, according to the Insurance Authority. The decline was sharper than the 76 per cent year on year fall recorded in the first-half. They accounted for 6.6 per cent of the overall spending on these products.

In the third-quarter, however, new premiums contracted by 68.3 per cent year on year to HK$266 million from the same period last year.

The biggest sequential decline was recorded between April 1 and June 30, when stringent restrictions to contain the virus were implemented. During that period, mainlanders spent only HK$839 million on life insurance products in the city, down 85 per cent from HK$5.4 billion in the first quarter.

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Some 48 per cent of insurance policies taken out by mainlanders in the city in the nine months were for critical illness, 36 per cent on life products and 5 per cent on medical insurance.

“I expect the fourth quarter will still be very poor as the number of confirmed Covid-19 infections has soared in recent weeks,” said Chan Kin-por, a lawmaker for the insurance sector. “Due to the 14-day quarantine requirement both sides of the border, few people will come.”