Bank of China (Hong Kong)’s new premiums surged more than 70 percent quarter-on-quarter in the first three months of 2021 while renminbi insurance premiums jumped 60 percent, driven by rising demand from more insurance-conscious consumers in the city amid a low interest environment, the bank said on Wednesday.
Its market share of renminbi insurance rose to 57 percent, with new premiums increasing 22 percent, according to Arnold Chow, deputy general manager for investment and insurance at the personal digital banking product department of BOC Hong Kong
Last year, the bank’s insurance business had a 56 percent market share of the online channel in Hong Kong with new online premiums increasing 74 percent year-on-year. Its market share of renminbi insurance rose to 57 percent, with new premiums increasing 22 percent, according to Arnold Chow, deputy general manager for investment and insurance at the personal digital banking product department of BOC Hong Kong.
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“The worst times are behind us, and the overall insurance market is expected to grow this year,” said Wilson Tang, chief executive at BOC Life, putting the improvement down to the rollout of the vaccination programme and the ensuing border reopening. BOC Life’s new premiums fell 17 percent year-on-year in 2020 to HK$11.34 billion (US$1.46 billion), ranking it third in market share, whereas new premiums in the city’s insurance industry nosedived 37 percent, Tang said.
BOC Life’s new standard premiums on online channels rocketed more than 70 percent year-on-year to nearly HK$1.5 billion last year, with more than 14,500 new policies created. More than 20,000 renminbi-policy contracts were sold last year, delivering new premiums of more than HK$4 billion, both double the number from 2016.
As the special administrative region’s government is launching an “Easy Entry” scheme whereby those in the Chinese mainland will no longer be required to undergo compulsory quarantine upon arrival in Hong Kong from mid-May, Tang said he believes such implementation will significantly benefit the insurance industry. However, the boost is expected to be cushioned by inbound travelers’ preference for different types of insurance and the appreciation of renminbi, he added. “If the renminbi continues to strengthen, the demand for HK$ policies will weaken,” Tang noted.
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Looking forward to the Wealth Management Connect Scheme in the Guangdong-Hong Kong-Macao-Great Bay Area which is expected to launch in the second half of this year, Chow said the bank is well prepared to seize the opportunity. “Customers in the town and from the north have different demands and preferences, but great demand on both sides will be generated as the plan was capped at 150 billion yuan ($22.96 billion) in each direction,” he added.