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Following is the speech by the Commissioner of Insurance, Ms Annie Choi, at the 20th anniversary cocktail of the Confederation of Insurance Brokers (CIB) this evening (June 20).
Good evening, ladies and gentlemen,
I am most delighted to join you here this evening to celebrate the 20th anniversary of the Confederation of Insurance Brokers.
A few months ago, I saw on the CNN news about a protest in the US. And there was a protest banner that caught my attention. It reads "20 years ago, we had Johnny Cash, Steve Jobs and Bob Hope. Now, we have no Cash, no Jobs and no Hope." We all know Steve Jobs. But for the younger ones in this room, Johnny Cash was an American singer-songwriter, who was considered one of the most influential musicians of the 20th century. Bob Hope was a world-renowned comedian whose entertainment career spanned over six decades. Both of them died in 2003.
Being the Commissioner, I do have the "Regulator Syndrome", and would not take any statements at their face value. I therefore did a bit of research.
Twenty years ago, Hong Kong had a population of 5.9 million. Today, the population is 7.2 million. The GDP per capita then was HK$152,000. Today, our GDP per capita is HK$285,000, representing a growth of 88 per cent over 20 years, or a rough average of 4.3 per cent per year. In 1993, the Hang Seng Index was on average 7,000 points. Today, it is around 21,000. A secondary school leaver joining the government as a clerk would receive a salary of HK$6,635. The pay for the same job is now HK$11,520. Of course, things have also become more expensive. The Consumer Price Index rose 50%, from 76 to 114. I was tempted to quote property prices, but then I decided not to.
Next, the insurance industry. In 1993, there were 229 authorised insurers. Today, we have only 154. On the other hand, our total insurance premium rose from HK$33 billion in 1993 to HK$255 billion last year. In short, the pie has grown 7 times, to be shared amongst a much smaller number of players. On average, each insurer has seen a 10-fold increase in its business.
This also means that our insurance density has increased from around HK$5,500 to HK$35,000, and our insurance penetration from 3.6 per cent to 12.5 per cent. In relation to jobs, there were roughly 27,000 insurance intermediaries in 1993. In fact, when CIB was established, it had only 38 founding members. Today, we have some 74,000 corporate and individual intermediaries. And CIB has also grown significantly, with 260 members and over 4,000 chief executives and technical representatives.
Having looked at all these figures, my conclusion is that as far as the insurance industry is concerned, we are much better off today in terms of cash and jobs than what we were 20 years ago. The allegation of No Cash and No Jobs certainly does not apply, at least not for our insurance industry.
But what about Hope? What will the outlook be for the next 20 years? Should we harbour high hopes for the future? Will the industry continue to thrive and flourish, as it did in the past two decades? What will the changes be? And what will the changes bring about? And many of us here would naturally be concerned about the changes that would take place in the coming months - the Independent Insurance Authority; the Policyholders Protection Fund; a new risk-based capital framework; all sorts of new regulatory requirements etc.
These are all new to the industry. They are the Twilight Zone. But would they stifle the industry¡¦s development? Are we charting our course into the Bermuda Triangle? These concerns are highly appreciated and fully understandable. Perhaps we should look to Johnny Cash, Steve Jobs and Bob Hope for some inspirations.
Johnny Cash was primarily a country music icon, but during his career from the 1950s to the 90s, his songs ventured into blues, jazz, rock and rolls etc. Since we have been talking about 1993, let's see what he did in 1993. By 1993, Johnny Cash was already 61, a successful musician with numerous gold and platinum albums, and presence in three major music halls of fame. He could certainly sit down and lie back. But he was not complacent.
In 1993, he went on to record a new folk album, and one major breakthrough was that he did the recording in his living room. This album, known as the American Recordings, brought to him not only commercial success, but also a Grammy Award for the Best Contemporary Folk Album. Impressive. Isn't it?
As for our good friend, Steve Jobs, many of you would know that he was forced to leave Apple in 1985. What happened afterwards, especially in 1993, was most important. After he left Apple, Steve Jobs founded NeXT Computer. And the World Wide Web came into being on a NeXT Computer in 1991. Steve Jobs then said boldly in an interview that "interpersonal computing is going to revolutionise human communications and group work."
In 1993, he made an important decision, which was to withdraw totally from the hardware business despite the many years of dedicated work. He would instead focus all his investment and energy on the development of the OpenStep software, which became the very foundation of Apple's Operating Systems for iPods and iPhones. Indeed, Steve Jobs has revolutionised the computer industry. He has changed not only the mode of communications, but also the mode of our daily lives, as he has predicted two decades ago.
So, if the success stories of Steve Jobs and Johnny Cash are of any relevance to the insurance industry, it would be the need to strive for improvement continuously and fearlessly. So long as we know that we are on the right direction, and that we are changing for the better, we should move ahead step by step. Inertia is simply not an Option. Success would not come overnight, and the process would not be easy. There are bound to be unknowns, doubts and questions, and it is up to us, the insurance industry, to come together, put our brains together and meander our way through the obstacles. And CIB, being a key member of the insurance industry, would no doubt be an integral and indispensable part of that endeavour.
Bob Hope once said, "I have always been in the right place at the right time. Of course, I steered myself there." So, why don't we all join our efforts, steering ourselves onto the right path? And I am sure CIB would do just the same - steering its members to take the right course while the industry continues to move on to new waters. Sooner or later, we will be there, in the right place and at the right time.
Thank you.
Ends/Thursday, June 20, 2013
Issued at HKT 21:21
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