The political turmoil that is currently brewing in Hong Kong has affected the city’s life insurance sector, among other industries.
Prior to the upheaval that began in June last year, life insurance services were being sold like hot cakes to Chinese tourists from the mainland in Hong Kong. It was also the preferred way for policy holders to get their money out of China.
AIA and Prudential, two of the leading life insurance companies in Hong Kong, were obtaining nearly 60 percent of their revenues from mainland Chinese tourists, who have to be present in person to purchase insurance in the city.
Quoting Hong Kong’s Insurance Authority, the Financial Times reported that the value of new life insurance products taken out by people in China witnessed an 18 percent drop to HK$1.2 billion in those three months till September last year.
And, in last November, the tourist footfalls from the Chinese mainland fell by 60 percent year-on-year. Financial experts have warned that the market has declined even more as the revolts have led to an increase in the anti-China mood that is already exists in the region.
According to Frank Yuen, senior analyst at Moody’s Investors Service, Chinese customers are vital to the insurance sector of Hong Kong. He said that but for the uprising, the year 2020 should be another great year.
The report further stated that to offset the decline in the number of tourists arriving in Hong Kong owing to the strife, many insurance firms have begun to bring customers by bus from the mainland to regions of Hong Kong that have remained immune to the unrest. This is being done to nullify the apprehensions expressed by tourists regarding their safety.