Insurance income from mainland visitors dries up

Hong Kong insurers' new office premiums generated from mainland visitors plunged 76.3 percent from a year ago to HK$6.24 billion in the first half of the year on cross-boundary passenger movement restrictions, the Insurance Authority says.

That represents 9.6 percent of the total for individual businesses, the regulator added.

In the second quarter, the new office premiums contracted 84.5 percent to HK$839 million from HK$5.4 billion in the first three months, when the pandemic started to take a toll on tourist arrivals and in-person signature of insurance policies.

The number of mainland tourists plummeted 90 percent year-on-year to 2.68 million in the first half, data from the Hong Kong Tourism Board showed.

The gauge continued to dive 99.9 percent year-on-year in July with the third wave of the coronavirus.

Currently, mainland visitors need to quarantine for 14 days upon arriving in the city and spend another 14 days in isolation after returning home.

"With the pandemic showing no abatement, its impact on premiums and profitability will become more evident in the coming quarters," the authority said.

The total number of new policies also dropped 87.6 percent year-on-year to 26,400 during the first half, with drops in all categories.

Total gross premiums grew 6 percent from a year ago to HK$313.7 billion. Of this figure, total revenue premiums of in-force long-term business were HK$280.3 billion in the first half, up 5.6 percent year-on-year.

On the other hand, new office premiums, excluding retirement scheme business, of long-term business declined 34.4 percent from the year-before period to HK$65.5 billion.

In the first half of 2020, around 46,000 qualifying deferred annuity policies were issued that brought in new office premiums of HK$3.2 billion, representing 4.9 percent of the total for individual businesses, the authority said.

Gross premiums in the first half were HK$33.5 billion, a year-on-year increase of 9.7 percent, and net premiums of general insurance business rose 8.8 percent to HK$22.8 billion.

stella.zhai@singtaonewscorp.com