Insurers rack up HK$205b in sales

Insurance sales rose last year as more people bought policies for investment and protection against risk, although insurers warn of a bleak outlook this year.

They feared that recent market turmoil and economic uncertainties would cut down investment appetite and spending power, which in turn would eat into the sales of policies.

Insurers sold 1.01 million policies last year, up 5.7 per cent from the previous year. Gross premium amounted to HK$205 billion, 11 per cent higher than in 2009. That amounted to 11.8 per cent of Hong Kong's gross domestic product last year, from 11.3 per cent in 2009, according to figures from the Office of the Commissioner of Insurance.

Chan Kin-por, legislator for the insurance sector said life insurance policies were a major growth driver last year. 'As the market recovered last year from the global financial crisis, many insurance companies sold more investment-linked policies, with buyers looking to use the products to gain from the market rally,' he said. 'That is likely to have changed this year as the global market turmoil in recent months would discourage people from buying investment-linked policies.'

Sales of investment-linked policies, in which buyers can choose to roll the premium into a number of investment funds at different levels of risk and return, were up 34.7 per cent over last year, for a total of HK$19.9 billion.

Traditional life policies, in which the insurance companies collect the annual premium from policyholders, invest them and then pay a dividend, increased by 25.1 per cent to HK$38 billion.