Hong Kong a market for investment-linked insurance

Hong Kong's role as a regional insurance hub has been further enhanced with the addition of UK company Scottish Mutual International (SMI), a leading offshore investment provider. It has joined more than 200 authorised insurers, which have established a presence in the city.

SMI, the offshore life assurance arm of the Abbey National Group and the fourth company under the group's umbrella to set up in Hong Kong, was officially launched tonight (September 25) by the Permanent Secretary for Financial Services and the Treasury, Mr Tony Miller.

"The investment made by Abbey National not only demonstrates its strong commitment to Hong Kong, but also its confidence in Hong Kong's long term insurance market, in particular, the targeted investment-linked market," Mr Miller said.

Premiums for long term insurance business in Hong Kong have experienced double-digit annual growth in the past five years, with investment-linked business being one of the forerunners, recording a remarkable 30 per cent growth in office premiums last year alone.

Total gross premiums of the Hong Kong insurance industry reached $76.3 billion in 2001, representing about 5.9 per cent of Hong Kong's Gross Domestic Product (GDP). Of this, total office premiums in force for long term insurance reached $56.8 billion.

Elaborating on the huge market potential, Mr Miller said a survey conducted by the Census and Statistics Department early this year found that of all persons aged 18 and over in Hong Kong, less than 11 per cent had heard of investment-linked insurance and 1.4 per cent held such products.

"This means nearly 90 per cent of respondents are your potential customers," he said.

Ends/Wednesday, September 25, 2002