The life insurance industry in Hong Kong is expected to grow at a compound annual growth rate (CAGR) of 6.6% from HKD543.5 billion ($70.0 billion) in 2021 to 748, 6 billion HKD ($96.5 billion) in 2026, in terms of direct written premiums (DWP), according to GlobalData, a leading data and analytics firm.
Anjuli Srivastava, Insurance Analyst at GlobalData, comments: “The life insurance industry is expected to grow 5.4% in 2022, supported by growing demand for protection-related plans, new product development and recovery. from the sale of life insurance policies to visitors from mainland China due to the easing of travel restrictions.”
Whole life insurance was the largest segment with a DWP share of 64.8% in 2020. It decreased by 1.1% in 2020 due to travel restrictions related to the COVID-19 pandemic. Prior to the pandemic, a large portion of whole life insurance premiums went to Chinese visitors, who purchased their policies in Hong Kong due to favorable terms and greater flexibility offered to them compared to policies sold in China. .
Endowment insurance was the second largest line with a 13.4% share in 2020. It grew 17.5% in 2020, driven by strong demand for high yield insurance policies. The introduction of investment-linked insurance with high mortality coverage should support demand for capitalization products. Endowment assurance is expected to grow at a CAGR of 9.9% over the period 2021-2026.
General Annuity, which is the third largest line with a DWP share of 9.3%, decreased by 16.2% in 2020. It is expected to grow at a CAGR of 6.3% over the period 2021-2026 , due to demographic factors such as life expectancy. Additionally, the introduction of tax benefits on qualifying deferred annuity policies in September 2021 will further support demand for annuity products.
Term life, retirement and other life insurance lines accounted for the remaining 12.5%.
Srivastava concludes: “The Hong Kong life insurance market is expected to be the third highest in the Asia-Pacific region, after India and China, with an expected CAGR of 6.6% over the period. 2021-2026. Gradual recovery of economic activities and increase in the sale of life insurance policies to mainland Chinese visitors is expected to support the growth of the Hong Kong life insurance market over the next five years. »