In recent years, customers from the mainland have been flocking
to Hong Kong to buy insurance products, making the city one of the
world's leading insurance markets.
Now, though, many insurance agents are concerned that new
capital controls could threaten the market's continued
prosperity. Last week, the central government tightened the
regulations that govern how mainland citizens buy insurance
products in Hong Kong. The move came just a month after the
nation's currency regulator capped payments made through
UnionPay, the mainland's dominant payment system, at $5,000 per
In addition, mainland customers will no longer be able to pay
for life insurance or investment-related products through
electronic payment services, although they will still be allowed to
buy medical and accident insurance, albeit with a purchase cap of
30,000 yuan ($4,600).
Industry insiders regard the new measures as a way of limiting
cash outflows. Before the new regulations, payments for insurance
products outside the mainland had been exempt from the annual
$50,000 limit on individuals sending money overseas.
Iris Pang, senior Greater China economist at the investment bank
Natixis, said mainland customers have been the driving force behind
the city's insurance boom in recent years, so many people in
the industry are concerned about the impact on the local insurance
The Hong Kong Office of the Commissioner of Insurance said
spending on policies by mainland visitors has surged dramatically
in the past six years; from HK$ 4.4 billion ($567 million) in 2010
to HK$21.1 billion through September last year. In 2014,spending
surged by 64 percent.
Before the new restrictions came into force, mainlanders bought
insurance as a tracker for asset allocation, according to
"Huang", an insurance agent with Prudential, a UK
insurance company based in Hong Kong, who asked not to be
"The returns on savings-type life insurance policies, which
are not subject to purchase restrictions, are usually at least 2 to
3 percent higher than those of bank savings," he said, adding
that for the past 10 years the average return for Hong Kong
insurance products has been 5 to 9 percent.
While the new restrictions will make it harder for mainland
customers to buy insurance policies from insurers in Hong
Kong－customers have to pay－via creditcard or cash,
Huang believes the new restrictions will not lead to a decline, at
not least in the short term.
"The 30,000-yuan-cap doesn't affect us all that much
because many customers are interested in products below that
limit," he said. "They are simply looking for certain
types of insurance products, such as medical insurance, which are
not subject to the purchase controls imposed on
(Source: China Daily, by Wang Yanfei)
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