GlobalData Predicts Life Sector Growth in HK

Hong Kong life insurance industry is projected to grow at a compound annual growth rate (CAGR) of 6.6% from HKD543.5bn ($70.0bn) in 2021 to HKD748.6bn ($96.5bn) in 2026, in terms of direct written premiums (DWP), according to GlobalData, a leading data, and analytics company.

Anjuli Srivastava, Insurance Analyst at GlobalData, comments: “Life insurance industry is forecasted to grow by 5.4% in 2022, 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.”

Whole life insurance was the largest segment with a DWP share of 64.8% in 2020. It declined by 1.1% in 2020 due to the COVID-19 pandemic-led travel restrictions. Prior to the pandemic, a large proportion of whole life insurance premiums were attributed to Chinese visitors, who purchased their policies from Hong Kong due to favorable terms and greater flexibility offered to them as compared to policies sold in China.

Endowment insurance was the second-largest line with a 13.4% share in 2020. It grew by 17.5% in 2020, driven by strong demand for high return insurance policies. The introduction of investment-linked insurance with high mortality coverage is expected to support the demand for endowment products. Endowment insurance is expected to grow at a CAGR of 9.9% during 2021-2026.

General annuity, which is the third-largest line with a DWP share of 9.3%, was declined by 16.2% in 2020. It is expected to grow at a CAGR of 6.3% during 2021-2026, driven by the demographic factors such as higher life expectancy. In addition, the introduction of tax benefits on Qualified Deferred Annuity Policies in September 2021 will further support the demand for annuity products. Term life, pension, and other life insurance lines accounted for the remaining 12.5% share.

Srivastava concludes: “Hong Kong’s life insurance market is expected to be the third-highest in the Asia-Pacific region, after India and China, with a projected CAGR of 6.6% during 2021-2026. 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.”

About alastair walker 10951 Articles
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