Growth in Hong Kong life sector slowing

August 19 2016 by InsuranceAsia News Staff

Weak domestic demand and new regulatory policies put in place by the Chinese government are beginning to slow growth in Hong Kong’s life  sector, according to A.M. Best.

Since 2010, Hong Kong has seen stellar double-digit growth annually in terms of new business premiums in direct individual businesses.

It has been the fastest-growing life insurance market among developed markets within the Asian region.

In 2015, premiums on new business from the Hong Kong life insurance market increased to HK$31.6 billion (US$4.04 billion) from HK$4.4 billion in 2010.

This accounted for 24% of new individual business, compared with 7.5% in 2010.

However, the report predicts that with rock-bottom interest rates and weak domestic demand, the level of growth is unsustainable.

This is true especially as Chinese authorities continue to crack down on channels allowing citizens to move large amounts of money offshore.

A.M. Best said it expected the growth rate to slow down as the Hong Kong domestic market is already one of the most penetrated markets in Asia.