Almost two thirds of mainland Chinese residents of the Greater Bay Area are interested in buying insurance products in Hong Kong, with critical illness cover at the top of their shopping lists, according to a survey released on Friday.
Reasonable premium prices, a wider range of products and higher yields are the main draw for mainland customers, according to the survey of about 1,000 respondents between February and May.
The results, released in a joint report by Deloitte China and BOC Life, suggest there are enormous business opportunities for Hong Kong's insurance sector once the border between China and Hong Kong reopens.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
"The large population base of the Greater Bay Area has huge market potential and new footholds for development of the insurance industry," said Wilson Tang, chief executive of BOC Group Life Assurance.
The bay area is a development zone mapped out by Beijing three years ago that aims to promote trade and capital flow among 11 cities in southern China to create an economic powerhouse similar to the bay areas in the US and Japan.
It consists of Hong Kong and Macau as well as nine cities in Guangdong province.
Mainland Chinese were the biggest spenders on Hong Kong insurance policies before the pandemic brought cross-border traffic to a standstill over the past two years. Since then they have all but disappeared from the market.
Hong Kong regulations require mainland customers to visit the city in person to buy insurance products here. The closure of the border to contain the Covid-19 pandemic cut down the number of mainland visitors by 98 per cent to just 65,921 last year, according to the Hong Kong Tourism Board.
They spent HK$688 million (US$87.65 million) on life and medical insurance policies in Hong Kong in 2021. Accounting for just 0.4 per cent of the total, that was the lowest in a decade, according to data from the Insurance Authority.
At the peak in 2016, they bought HK$72.68 billion worth of policies, representing 39 per cent of all premiums collected in the city.
"Mainland customers will come back once the border is reopened, as the insurance industry has a wide range of products to provide protection for them," said Selina Lau, chief executive of the Hong Kong Federation of Insurers, an industry body of 138 insurance companies in the city.