Hong Kong’s banking and insurance sectors among biggest winners under Greater Bay Area blueprint, say analysts

Hong Kong and the other cities in the “Greater Bay Area” are likely to see an increase in cross-border insurance and banking activity, mutual fund investments and commodities trading under the blue print unveiled by the Chinese government on Monday evening.

The insurance sector will be one of the biggest winners under the plan for the new economic hub because it will enable more cross-border insurance policy sales, claims and investigations, said analysts. The plan also includes measures to encourage insurance companies in Guangdong, Hong Kong and Macau to jointly develop innovative cross-boundary car and medical insurance products to allow policyholders in both markets to easily buy products and make claims.

It will also support Shenzhen in developing a pilot zone for development in insurance innovation, further enhance the level of connectivity between the Hong Kong and Shenzhen markets, and promote cooperation between Macau and Shenzhen with respect to special financial products and launching pilot fintech projects.

Moses Cheng, chairman of the Insurance Authority of Hong Kong, said the initiative “will deepen cooperation among the insurance sectors in Guangdong, Hong Kong and Macau, better coordinate the movement of people, goods and capital in the region, and promote closer regional economic collaboration.

“Hong Kong’s insurance products will be highly competitive in the markets of the Greater Bay Area. Leveraging the advantages of Hong Kong’s insurance industry will not only help further the development of the Guangdong-Hong Kong-Macau Greater Bay Area, but also open new horizons and bring new momentum to the sustainable development of the industry, bolstering Hong Kong’s role as a risk management centre.”

Beijing will explore the establishment of an international commercial bank in the China (Guangdong) Pilot Free Trade Zone to serve the development of the Greater Bay Area. It will also explore setting up an account management system to facilitate cross-border usage of the yuan and capital account convertibility so as to make it easier for cross-border settlements of trade and investment.