Returns fear for insurance investors

Business | Avery Chen 17 Apr 2019

The Insurance Authority is advising annuity investors to focus on fulfillment ratios and internal ratios of returns when purchasing annuity products and is concerned about the low dividends from some products.

It has certified nine qualifying deferred annuity policies eligible for tax deductions so far. Taxpayers are allowed to claim a deduction for their premiums up to HK$60,000 per year.

Carol Hui Mei-ying, executive director of long-term business, said many insurers have submitted annuity product applications and expects more deffered annuity policy products with annuity periods of more than 10 years.

Marty Lui, associate director for long term business, said investors should evaluate internal ratios of returns, converting annuity incomes into annualized calculations, adding people need to pay attention to guaranteed and non-guaranteed income, which may be affected by insurers' business.

Liu advised investors to keep an eye on fulfillment ratios to understand non-guaranteed benefits declared by an insurer and that a fulfillment ratio of more than 100 percent would be ideal.

Meanwhile, Blue Cross (Asia-Pacific) Insurance launched a smartphone app yesterday, adopting blockchain technology.

Managing director Patrick Wan said the company invested seven figures to develop the new app, which can enhance the efficiency and security of medical claims services. He said there is only a three-step process to finish a digital medical claim.

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