FIRST
Insure ‘til you drop
Hey insurers: No robo-advisors here
H
ong Kong plays host to over 40 million mainland Chinese visitors each year, many of whom come to visit Disneyland, sightsee, and shop for products like baby powder that are hard to get in the mainland. One other thing they have had on their shopping list is insurance policies issued in Hong Kong but which cover them on the mainland. Adding on a trip to an insurance centre has become so much a part of trips to Hong Kong that insurance offices are the fastest growing sector in taking up office space in the territory. Surging demand In 2015, mainland Chinese visitors spent USD 4.1b on insurance policies, 30% higher than the previous year and almost 400% more than 2011 levels. To meet the surge in demand, insurers have added an extra 20,600 people to their headcounts over the past five years (2011-2015), with 12,500 people being added in the last two years alone, according to Denis Ma, head of research at property firm JLL. “Although the mainland government has tightened restrictions on the use of third-party payment providers to buy insurance products in the city, including the restriction on mainlanders using their China Union Pay debit cards to
More people ‘shop’ for insurance plans in Hong Kong
buy policies, the underlying factors driving growth in this industry remain unchanged.” Regulation Bloomberg noted that in one tightening move in February, mainland regulators limited the amount of money that residents could transfer to buy certain policies using China UnionPay Co. credit or debit cards. The response: some buyers swiped cards hundreds of times to make a single purchase. One reason mainlanders are buying insurance policies in Hong Kong is that it is a way to move money out of the country legally, and that demand is one thing that is unlikely to change.
people
New appointees in Asia’s insurance companies Swiss Re Corporate Solutions appointed Jonathan Rake as head of Southeast Asia, effective October 1st. Rake will assume responsibility for accelerating business growth in the region. Based in Singapore, Rake will report directly to Fred Kleiterp, CEO, AsiaPacific at Swiss Re Corporate Solutions. Also in Singapore, Chubb appointed several new executives in November: Koh Wei Lee as division head of accident & health (A&H) and personal & business insurance (PBI); Kevin Xiong as the new head of agency; and Risa Wong as the head of Travel, A&H and PBI. Koh and Xiong will report to Adam Clifford, country president for Chubb in Singapore. MetLife appointed Lee Wood as CEO for its Hong Kong business. Wood will be based in Hong Kong and will report to Damien Green, regional executive of MetLife Asia. Wood has over 15 years of industry experience. 6 INSURANCE ASIA
Jonathan Rake
Lee Wood
In 2015, mainland Chinese visitors spent US$4.1b on insurance policies, 30% higher than the previous year.
A survey by Transamerica Life Bermuda found 75% of clients who favour insurance-related solutions tend to be moderate or moderately conservative in their risk tolerance, which has seen demand for life insurance as a low-risk wealth management tool rise. Notably, almost two of three wealth managers surveyed say that childbirth or succession planning is the key trigger event most likely to lead to a conversation about life insurance. This is followed closely by family death or serious medical issues, and significant changes in business ownership. Amongst the three most important criteria that clients look out for when selecting a life insurance provider, product pricing emerged top (73%), followed closely by financial strength (67%) and brand reputation or heritage (56%). Two out of these three factors are trust-based. Growth stimulators The survey also revealed that the most significant factors stimulating growth of life insurance across private banks include the need for client estate, legacy planning and health coverage (36%) and increased relationship manager education (30%). On the other hand, the most significant factors that inhibit growth of life insurance across private banks include unsuitable product terms and pricing (37%), and lack of client or relationship manager understanding (28%). HWNIs also prefer personal service in spite of the trend of digitalisation. Out of the 455 respondents surveyed, a large majority (73%) indicated that their clients prefer to communicate with a relationship manager or private bank, and mostly prefer via phone.