MarketAPE was down 37% for both onshore and offshore segments
National security law and removing HK special status: implications for insurers?
Investors are asking about the implications for HK insurers from the HK national security law, as well as US announcement on eliminating special treatment to HK. Near-term uncertainty on social unrest aside, we believe major value propositions of HK insurance products to mainland Chinese visitors (MCV) remain unchanged.
Addressing investor concerns on HK offshore sales
Investors are concerned on outlook for HK offshore sales. As we already only expected a gradual recovery of MCV business in H220, a re-escalation of HK social unrest does not present material downside risk to our numbers. Competitive product pricing, overseas medical treatment and offshore asset allocation remain major valuation propositions of HK insurance products for MCV consumers. Post tightening of Union Pay in 2016, MCV product mix has greatly improved. MCVs' primary focus is better protection and investment returns, instead of just moving money across the border.
What can regional insurers do to mitigate any negative impact?
As most regional markets have adopted digital signature across a wide range of products, we see room for deregulation in HK on insurance distribution.
Latest HKIA data suggest HK onshore business is resilient
We expect strong HK local business momentum to serve as a key buffer against the offshore segment due to pent-up demand post COVID-19