Hong Kong insurance companies defy 2015 asset dip

Added 25th July 2016

Insurance companies in Hong Kong reported a 3.5% increase in assets under management to HK$468bn (£45.6bn, $60.3bn) during 2015, compared with a decrease of 1.6% for the jurisdiction’s combined fund management business.

Hong Kong insurance companies defy 2015 asset dip

Hong Kong’s Securities and Futures Commission (SFC) advised that the increase was mainly down to normal growth in the traditional life insurance and retirement scheme business.

This growth was partially offset by a decrease in linked long term business during the year, the regulator said. 

A total of 621 firms responded to the SFC's questionnaire and reported that they conducted asset management, fund advisory and/or private banking business during the survey period.

These included 555 licensed corporations, 45 registered institutions and 21 insurance companies.

Combined fund management

The combined fund management business remained at its second highest level in five years during 2015 despite the slowdown. The combined funds were up by 92% from HK$9trn in 2011.

 

The number of corporations licensed for asset management in Hong Kong, however, increased by 10.1% in 2015 compared with 2014.

 The special administrative region’s asset management business decreased by 4% to nearly HK$12.3trn, which the SFC attributed the decrease to a drop in asset prices contributing to a reduction in assets under management. 

More than 58% of the assets managed in Hong Kong were invested in equities.

Fund breakdown

Institutional funds, SFC-authorised retail funds and so-called 'other funds' continued to account for more than 60% of the aggregate asset management and fund advisory business.

Other funds mainly comprise overseas retail funds, hedge funds, private equity funds and insurance portfolios.

Despite net cash outflows amid market fluctuations and an uncertain economic outlook, 'other funds' and mandatory provident funds (MPF) recorded slight increases of 0.5% and 4.9% respectively in 2015.

At the end of 2015, the number of corporations licensed for asset management grew by 10.1% to 1,135 corporations from 1,031 a year ago, surpassing the number of corporations licensed for all other types of regulated activity.

Among the 104 corporations newly licensed for asset management, 19.2% were from mainland China and 7.7% were from overseas.

Overseas investors remained a main source of funding for Hong Kong’s fund management business, accounting for 68.5%.

"Amid a volatile year in global markets, Hong Kong maintained its position as a leading international fund management centre," said Ashley Alder, SFC chief executive. 

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About Author

Kirsten Hastings

Senior Reporter

Kirsten is a senior reporter for International Adviser, covering global news stories about the financial services industry. She joined Last Word Media in October 2015 after two years working as a reporter covering the staffing and recruitment industry. Kirsten has a Masters in Financial Journalism from the University of Stirling. 

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