Insurance market to ‘grow stronger than ever’ amid developments in GBA

Macau is said to have become the premier destination for Greater Bay Area (GBA) residents seeking insurance products.

In an interview with the Times, Manulife said that its local business was on the rise amid the pandemic as mainland China visitors return following the border reopening in late 2020.

In the first half of this year, despite the impact of the pandemic, the company said mainland Chinese visitors accounted for about 63% of its annualized premium equivalent (APE) sales.

Data from the insurance company shows that demand from local residents for health and protection is increasing as people are becoming significantly more health conscious after the outbreak of Covid-19.

Amid the downturn, the agency’s headcount also grew by 19% in the last 12 months ending June 30.

Currently, Manulife has around 1,000 agents in Macau.

For Carrie Tong, Chief Strategy Officer and head of Macau Branch, Manulife Hong Kong and Macau, Macau’s insurance market is forecasted to grow stronger than ever as the government has fully pledged on development of the GBA.

Macau Daily Times (MDT) – How is the GBA offering growth potential for the insurance industry?

Carrie Tong (CT) – With the rapidly developing GBA, Macau’s insurance market is set to grow ever stronger. Since the signing of the Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation in the Development of the GBA in 2017, development within the GBA has accelerated, from building infrastructure to knowledge and talent exchange within cities, contributing to the region’s economic growth. Yet, insurance penetration and density remain low in the region.

According to KPMG’s GBA industry research report, the insurance penetration of nine GBA cities in mainland China was 5.5% in 2019, close to Macau’s 5.9% but only one-fourth of Hong Kong’s 20.8%.

In terms of insurance density, insurance premium per capita in Hong Kong amounted to nearly RMB70,000, more than nine times of the nine mainland GBA cities (RMB 7,400) while it was about RMB29,000 for Macau. There is tremendous opportunity for the insurance industry to grow in GBA.

MDT – What percentage is Manulife targeting to penetrate in the GBA (any cities in particular)? Any data available in terms of Macau, Hong Kong and other mainland cities?

CT – With a low insurance penetration rate, the GBA potential is huge. […] What I can tell is after the border between Macau and mainland China re-opened in late 2020, Macau has become a premier destination for GBA residents looking for top quality protection products. We have recorded very strong results in 2021 with an increase of 126% in APE sales.

In the first half of 2022, despite the impact of the pandemic, Manulife Macau’s in-force premium grew by 22% year-on-year, outperforming the market average growth of 5%. Mainland visitors accounted for about 63% of our APE sales in the first half of 2022.

With mainland visitors able to travel to Macau using e-visa from November 2022, we expect the demand from the mainland to come back soon and will continue to increase.

To better understand the needs of mainland Chinese customers, Manulife conducted a survey late last year with nearly 1,600 respondents from nine mainland GBA cities who have visited Hong Kong in the last 36 months and currently own or are interested in purchasing insurance products in Hong Kong in the next two years.

Results from the survey showed that 91% of the respondents are eager to visit Macau within the first six months. 24% even said they will visit Macau within the first few weeks.

Results further show that respondents have the desire to purchase not just one insurance product, but close to three on average. Respondents are most interested in purchasing critical illness and personal accident products, attracting 40% and 33% respectively. Additionally, respondents are interested in long-term savings insurance, universal life insurance and investment linked insurance.

Among the respondents, 86% who are married plan to buy insurance for spouses, while 62% of parents are looking to buy insurance for their children, showing the growing trend of protecting family members.

MDT – How has the sector been affected by the pandemic, and how has Manulife been promoting its policies amid this crisis?

CT – In general, pandemic drives investments in personal health, people are now more aware of critical illness and medical products since the outbreak of Covid-19. […] When we look at the GBA market, Macau became the premier destination for GBA residents looking for top quality protection products as the city remains the only location with quarantine-free travel.

To deliver seamless customer experience, we are investing over HKD400 million in 2021 and 2022 to further transform and upgrade digital applications and experiences for our agents and our customers.

Understand that most mainland visitors only stay two to three days during their visit in Macau, we are optimizing the process and enhancing customer experience for mainland visitors to purchase insurance and make payment. With mainland visitors able to travel to Macau using e-visa from November 2022, we anticipate their demand will continue to increase

MDT – What policies are mostly wanted by Macau residents, and what are your plans on boosting the sector in the city?

CT – We see demand for health and protection is increasing as people are becoming significantly more health conscious after the outbreak of Covid-19. Not only do they seek long-term health protection, but they are also seeking comprehensive and flexible insurance products. […] We have also strengthened our product mix to provide customers in the region with tailored quality health and protection products.

MDT – Does Manulife see greater potential in Hengqin in terms of penetrating the local market, or the GBA market because of the strengthened Macau-Hengqin relations?

CT – The Guangdong-Macau In-depth Cooperation Zone in Hengqin and the overall GBA development plan are key strategic projects strongly supported by the national government and local governments in the region. We believe that it will achieve significant long-term growth, and deepen service trade liberalization across the border, benefiting the insurance and other industries. We will continue to accelerate investment in Macau and Hong Kong where the two cities will serve as important platforms for us to meet our customers.