- Mainland buying more than doubled to HK$16.9b in 2nd quarter
- Purchases surged even after Chinese regulatory curbs
Hong Kong’s insurance sales to Chinese residents more than doubled in the second quarter to a record even as China’s regulators took further steps to limit purchases of the products, which can serve as a way to sidestep the nation’s capital controls.
Mainland purchases of insurance and related investment policies in the three months ended June climbed to HK$16.9 billion ($2.2 billion) from HK$7.1 billion a year earlier, according to numbers derived from first-half figures reported Wednesday by the Office of the Commissioner of Insurance in Hong Kong. That compared with the previous high of HK$13.2 billion in the first quarter.
For the first half of the year, sales to Chinese residents amounted to HK$30.1 billion, or 37 percent of new individual premiums in the city. That compares with 34 percent for the first three months of the year.
China has been progressively tightening the rules governing sales of Hong Kong insurance to mainland residents, part of moves to clamp down on residents seeking to move money out of the country and evade capital controls. Such flows accelerated last year amid a corruption crackdown at home and fears that the yuan would weaken further.
Hong Kong policies are also popular with mainland buyers because of the perception they offer better benefits than equivalent products sold by Chinese insurers.
Earlier this year, mainland regulators limited the amounts of money that residents could transfer to buy certain policies using China UnionPay Co. cards. In response to that, some buyers swiped cards hundreds of times to make a single purchase.
In May, the China Insurance Regulatory Commission told its branches to investigate sales of overseas insurance policies on the mainland, Caixin magazine reported. The marketing of such policies inside China, through investment seminars or other public sessions, is prohibited, Caixin said, citing a person close to the regulators.
In July, the Hong Kong insurance commissioner’s office warned brokers that they may violate Chinese rules on cross-border marketing and sales if they pitch policies to Chinese residents via social media. And as of September, mainland buyers will be required to sign an acknowledgment to show they understand the risks in the Hong Kong policies they buy.
Purchases by mainland visitors grew 30 percent last year to HK$31.6 billion, according to the insurance commissioner’s office.