The Hong Kong life insurance industry is set to return to growth in 2023, after declining by 0.3% and 4.6% in 2021 and 2022 respectively, due to strict Covid-19 restrictions and economic slowdown, according to research company GlobalData.
The recovery in the country’s life insurance market will be driven by ongoing positive economic developments and lifting of international travel restrictions.
According to GlobalData’s Insurance Database, Hong Kong’s life insurance industry is estimated to record a compound annual growth rate (CAGR) of 3.5% in direct written premiums (DWP), increasing from HK$500.3bn in 2023 to HK$573.5bn (£61bn, $73bn, €69bn) in 2026.
Sravani Ampabathina, insurance analyst at GlobalData, said: “Chinese residents are a prominent consumer segment for Hong Kong life insurers as life insurance products available to them in Hong Kong offer greater flexibility and higher returns compared to China. Due to post-pandemic travel restrictions, the share of business from Chinese customers declined in 2020 and 2021.
“Favorable regulatory developments and the government measures to establish Hong Kong as a major financial hub will support the growth of life insurance in the country in the coming years.
“Life insurers are expected to further benefit from the ongoing developments in the Guangdong–Hong Kong–Macao Greater Bay Area (GBA). The GBA is a megacity consisting of nine urban cities and two special administrative regions in South China, with GDP exceeding $1.9trn in 2021, about nine times that of Hong Kong.
“The economic developments in the GBA, easing of travel restrictions and government support will help growth of life insurance business in Hong Kong over 2023-2026.”
