More mainland clients set to take out insurance policies in SAR

The insurance industry stands to benefit the most from the further opening up of the mainland market to Hong Kong's service sector under the Closer Economic Partnership Arrangement (CEPA).

"A step forward to further opening up the mainland financial market, especially in Guangdong province, will strengthen Hong Kong's position as one of the world's leading asset management centers," said Samuel Yung Wing-ki, founding president of the Hong Kong Professionals and Senior Executives Association and a member of the Chinese People's Political Consultative Conference.

Many mainland people are already coming to Hong Kong to purchase, among other things, insurance policies. With the progressive opening up of the mainland market under CEPA, it's widely expected that Hong Kong insurers will be allowed to market their policies in designated mainland cities.

Latest industry figures show that mainland clients accounted for 20.3 percent of the total insurance premium in the first three quarters of 2014. Yung said he expects to see more mainland people coming to the SAR to buy insurance.

"Opening up the insurance sector to Hong Kong insurers would make it more convenient for mainland customers to benefit from Hong Kong's well-developed health insurance coverage at more competitive prices," Yung told China Daily in Beijing.

Insurance companies on the mainland tend to focus on short-term products which usually yield higher interest income for the customers, Yung said. Hong Kong insurers are more experienced in longer-term products that provide more comprehensive coverage that appeal to a growing number of mainland clients, he said.

Introducing competition from Hong Kong could expedite the development of the mainland's insurance industry, Yung said. "Instead of hurting the mainland insurers, competition from Hong Kong can help them develop faster to meet the needs of potential clients."

Yung said he expected the central government will take the initiative to help the domestic insurance industry to innovate and diversify so that it can offer a wider choice of policies to customers.

"There will be further discussions on the regulatory framework and taxation, but going forward, we should gain knowledge and experience," he said.

Priscilla Lau Pui-king, a deputy to the National People's Congress, said Hong Kong's services sector is fully ready to play a greater role to grow with the mainland's financial industry.

selena@chinadailyhk.com

(HK Edition 03/04/2015 page8)