Where trust builds lives

China Daily (Canada) - - HONG KONG - By LUO WEITENG in Hong Kong

sophia@chi­nadai­lyhk.com

Andy Tse Kwok-fai and Johnny Chan Chi-kin, in­sur­ance veter­ans with more than 30 years in the in­dus­try, have been true wit­nesses to and ac­tive par­tic­i­pants in the ups and downs of the high-fly­ing sec­tor in Hong Kong.

The pair had quit well-paid jobs (more than HK$10,000 monthly was noth­ing to scoff at in the 1980s) to make their bold move into in­sur­ance, bet­ting big on longterm op­por­tu­ni­ties in the sec­tor.

Th­ese days, there is no short­age of head­line-mak­ing sto­ries in in­sur­ance and jaw­drop­ping prices of poli­cies. But Tse and Chan were among the trail­blaz­ers and, af­ter hold­ing se­nior po­si­tions at in­sur­ance gi­ant Man­ulife (In­ter­na­tional) Ltd for sev­eral years, also es­tab­lished their own in­sur­ance com­pany SV Group in 2009.

But back in the 1980s, there was no such hype sur­round­ing the in­sur­ance sec­tor. In fact it may be said to have been in the dol­drums, with hard-pressed in­sur­ance agents slack­en­ing their pace, tired of play­ing the game, re­called Tse.

As waves of mass mi­gra­tions from Hong Kong reached their cli­max in the 1990s ahead of the ter­ri­tory’s han­dover, the lo­cal in­sur­ance in­dus­try re­ally felt the pinch and suf­fered an ex­tended down­turn.

At that time, the busi­ness was akin to the Wild West, with no li­cens­ing sys­tem to reg­u­late agents. Thanks to the launch of the li­cens­ing regime in the 1990s, the in­sur­ance sec­tor got on a stan­dard­ized and pro­fes­sional track, with nearly 50 per­cent of lo­cal agents get­ting univer­sity de­grees.

In sub­se­quent years, it was the thriv­ing lo­cal econ­omy and soar­ing main­land growth that spelled the be­gin­ning of a golden era for the city’s in­sur­ance in­dus­try.

Hong Kong was build­ing up its brand as a global fi­nan­cial cen­ter, a feat that called for an army of fi­nan­cial pro­fes­sion­als, in­clud­ing those mak­ing a ca­reer in in­sur­ance. That saw the in­sur­ance in­dus­try be­come the bright spot in the job mar­ket, em­brac­ing new tal­ents with myr­iad op­por­tu­ni­ties and hefty salaries.

The long-es­tab­lished in­dus­try is a ma­jor rev­enue gen­er­a­tor for the city. In the first half of last year, to­tal gross pre­mi­ums con­trib­uted to 16.2 per­cent of Hong Kong’s gross do­mes­tic prod­uct (GDP).

The high-pro­file in­dus­try is never short of buzz over the at­trac­tive pay on of­fer. Ac­cord­ing to Chan, fresh grad­u­ates can well ex­pect as much as HK$20,000 monthly wage plus a 15 to 30 per­cent bonus in the very first year it­self. In the se­cond year, the monthly salary will be dou­bled and nor­mally it takes agents just three to five years to start earn­ing mil­lions an­nu­ally.

Tse and Chan be­lieve the prospects of Hong Kong’s in­sur­ance sec­tor in the com­ing few years would con­tinue to lie in the in­sa­tiable ap­petite of main­land cit­i­zens for in­sur­ance poli­cies.

Growth ex­pec­ta­tions are be­ing fu­eled by the coun­try’s low rate of in­sur­ance pen­e­tra­tion, giv­ing providers in­clud­ing Hong Kong-based in­sur­ers, room to catch up. Pre­mi­ums were only 3 per­cent of Chi­nese main­land GDP in 2014, com­pared with 7 per­cent in the US and 11 per­cent in Ja­pan, ac­cord­ing to Zurich-based global rein­sur­ers Swiss Re.

“The in­sur­ance in­dus­try in the world’s se­cond-largest econ­omy is brim­ming with fer­tile soil. The room for growth is gi­gan­tic,” Tse pointed out.

In par­tic­u­lar, the na­tion’s grow­ing de­mand for as­set trans­fers and med­i­cal care re­sources is be­lieved to be the high­lights of ar­eas that Hong Kong in­sur­ers could cap­i­tal­ize on, said Chan.

All th­ese ex­cit­ing op­por­tu­ni­ties will make in­sur­ance an even more highly sought-af­ter and lu­cra­tive pro­fes­sion in Hong Kong, as the in­dus­try al­ways opens its doors to peo­ple from dif­fer­ent walks of life, he noted.

Cases in point in­clude a for­mer man­ag­ing di­rec­tor of a lo­cal ra­dio sta­tion, who was tired of of­fice pol­i­tics and turned to SV Group for a brand-new ca­reer in in­sur­ance, said Tse.

An­other in­volves a for­mer Hong Kong movie star who be­came an A-list agent for SV Group. A yearn­ing for more di­verse ca­reer op­tions and for be­ing her own boss saw the woman make a bold move into the in­sur­ance in­dus­try and she even­tu­ally made a name for her­self in the mar­ket as team leader of nearly 200 staff.

More im­por­tantly, Tse be­lieves in­sur­ance agents with a main­land back­ground could ex­pect to play a big­ger part in the sec­tor, in view of main­land pol­icy hold­ers’ buy­ing spree in Hong Kong.

In the first nine months of 2015, main­lan­ders spent HK$21.1 bil­lion on in­sur­ance poli­cies in Hong Kong, rep­re­sent­ing 21.7 per­cent of new pre­mi­ums.

Ac­cord­ing to Tse, main­land in­sur­ance agents, who make up nearly 10 per­cent of SV Group’s head­count, con­trib­uted al­most 40 per­cent of the to­tal gross pre­mi­ums so far. As for Man­ulife, main­land in­sur­ance agents gen­er­ated more than 16 per­cent of the com­pany’s to­tal gross pre­mi­ums and 50 per­cent of awards won by the in­sur­ance gi­ant in 2015.

As for the mis­un­der­stand­ings and stereo­types sur­round­ing the pro­fes­sion, such neg­a­tive im­pres­sions are a thing of the past in Hong Kong but a hard fact on the Chi­nese main­land, said Chan. But he be­lieves the main­land stereo­types will also dis­ap­pear within the next 10 years, amid re­mark­able im­prove­ments in the pro­fes­sion­al­ism of main­land in­sur­ance agents.

But Hong Kong agents need to step up their game. The emer­gence of post­mil­len­nial fi­nan­cial plan­ning in Hong Kong is set­ting the bar in­creas­ingly high for in­sur­ance agents and tal­ents with av­er­age qual­ity are doomed to be pushed out of game, warned Tse.

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