Covid-19 is spurring younger Hongkongers to buy more insurance protection

Hongkongers are buying more insurance from a younger age, as five online insurers joined the fray during the Covid-19 pandemic

Higher sales of new policies to a younger pool of customers helped offset massive losses from mainland Chinese clients due to the border shutdown

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The insurance industry is benefiting from the infusion of technology as sales to younger customers grow. Photo: Shutterstock

Published: 3:00pm, 2 Jan 2022Updated: 6:58pm, 2 Jan 2022

More people in Hong Kong are buying insurance coverage from a younger age, as the Covid-19 pandemic and wider access to online financial products and services help push sales of new policies in the city.

The average age of Hongkongers buying tax-deductible annuity products – a type of pension plan sold by insurers through non-face-to-face channels – is 40 as of December last year, compared with 47 on average in 2019, according to data published by the Insurance Authority. Hong Kong currently has five online insurers.

“It is an encouraging sign,” said Carol Hui, executive director of long-term business at the Insurance Authority. “We will continue to spur more younger people to buy products that offer protection for their families and their own retirement needs.”

People crossing the street in Hong Kong’s Central district on December 5. 2021. Photo: Felix Wong

The industry has embraced advanced technologies to help boost coverage, with five virtual insurers competing with traditional giants in reaching out to more Hongkongers through the internet, as customers became more tech-savvy during the pandemic.

Hong Kong faces a mortality protection gap of HK$6.9 trillion (US$884.6 billion) or HK$1.9 million per person, exposing many families to financial troubles in the event of the death of the breadwinner, the Insurance Authority said in a study published in September.

For its part, the Insurance Authority has loosened a rule to help grease sales during the pandemic. Since February 2020, agents from traditional insurers have not been required to strictly conduct their sales through face-to-face meetings, given the social distancing rules and efforts to contain the virus.

“The pandemic has helped encourage more people to buy insurance products online,” said Charles Hung, CEO of Blue, one of the five approved online insurers. “This is likely to be the long-term trend even after the outbreak is over.”