HSBC Life assured of growth

HSBC Life expects to see a double-digit growth in the value of new business in the second half.

Chief executive Edward Moncreiffe said real returns from equities, bonds, properties and many other assets are negative presently while insurance products can offer investors the security of no losses.

He added that insurance is a business that makes long-term promises with prices at the long end of the yield curve, which means that a rise in the prime rate will not materially impact the pricing of insurance products or customers.

The Hongkong and Shanghai Banking Corp took the local lead last week by increasing its prime rate by 12.5 basis points to 5.125 percent, the first time in four years, and the move was quickly matched by Standard Chartered Hong Kong, Bank of East Asia, Hang Seng Bank and Bank of China (Hong Kong).

On top of that, Moncreiffe said, the increase in the cost of cash and borrowings will certainly change the way that Hongkongers save and make their money work.

The life insurer's head of products, Cheung Ka-chun, said more individuals who used to consider investing in property when prime rates remained low are now seeking out financial products that are more profitable than bank deposits.

New business at HSBC Life in the first half saw a 57 percent year-on-year surge, driven by virtual channel sales during the pandemic, and new insurance products, the insurer said last month.

That came as Hang Seng Bank (0011) approved 175 percent more green loans to HK$17 billion in the first half.

It has opened a new business banking center at Wan Chai to provide services such as business banking, green financing and an environmental, social and corporate governance-focused service concept with an eco-aware design.