Hong Kong’s life insurance market value has been pegged to soar over the next few years, driven by the pandemic-era trend to get one’s affairs in order.
The industry is forecast to grow at a compound annual growth rate of 6.6 per cent, and more than five per cent over the 2022.
Analysts at GlobalData anticipate direct gross written premiums to swell from £53.4bn in 2021 to £73.6bn in 2026.
The growth will be “supported by the growing demand for protection-linked plans, new product developments, and the resumption in the sale of life insurance policies to mainland Chinese visitors due to easing travel restrictions,” according to insurance analyst Anjuli Srivastava.
The mainland hosts a significant portion of consumers, due to favourable terms and greater flexibility offered compared to policies sold in China, the analytics company added.
Whole life insurance is the largest segment in the financial hub’s market, with a nearly 65 per cent share in 2020. Endowment insurance is second-largest line, after growing 17.5 per cent in 2020, as the demand for high return insurance policies rocketed amid the rise of Covid-19.
“Hong Kong’s life insurance market is expected to be the third-highest in the Asia-Pacific region, after India and China,” added Srivastava.
“Gradual resumption in economic activities and increase in the sale of life insurance policies to mainland Chinese visitors are expected to support the growth of Hong Kong life insurance market over the next five years.”
Hong Kong, the largest financial hub behind London according to the Global Financial Centres Index, has been hit hard by the pandemic in recent weeks. And while Covid-19 has accelerated written premiums in the market, there is still a long way to go before it rival’s London’s insurance industry.
Home to one of the largest insurance markets in the world, London has an industry worth around £220.4bn in total direct premiums, according to Statista in January.