Visitors from the Chinese mainland purchased less insurance products in Hong Kong during the first nine months of the year as tighter capital controls crimped sales, the Hong Kong's Insurance Authority said on Wednesday.
New premiums for policies sold to mainland visitors by insurers in Hong Kong declined 20.8 percent on a quarterly basis in the first three months of this year, 38.3 percent in the second quarter and 13 percent in the third, it said.
In the third quarter of this year, mainland visitors bought insurance policies in Hong Kong worth HK.1 billion (.29 billion), a 46.6 percent decrease from HK.9 billion during the same period of last year. In the first nine months of this year Hong Kong insurers sold HK.5 billion of new insurance policies to mainland customers, 17 percent down from HK.9 billion in the same period last year.
Carol Hui Mei-ying, the Insurance Authority's executive director for long-term business, said the decline was driven by a stable mainland currency, insurance companies' adjustment of strategies and stronger regulatory policies.
"Tighter control on capital outflows last year was one of the reasons for the decline in new premiums and policies sold to mainland customers. Sales of short-term, high-yield products like universal life insurance, which is considered by mainland customers as a channel to transfer assets overseas, plummeted to HK million in the third quarter, a 78 percent decrease from quarterly average sales in 2016," Hui added.
She said about 95 percent of the policies issued to mainland visitors this year were medical or protective in nature, such as coverage for critical illness, medical, whole-life, term-life and annuity products. In terms of premium payment pattern, about 99 percent of the policies were paid at regular intervals.
China UnionPay has banned mainland customers from using their bank cards to buy insurance products overseas other than accident and medical-related policies. But the restriction did not immediately cause any drop in new premiums for policies issued to mainland visitors last year. In the fourth quarter of last year, new policies sold to mainland customers reached a record high of HK.7 billion.