(Yicai Global) April 11 -- After a three-year slump, Hong Kong’s insurance market has begun to attract Chinese mainland clients again. Industry insiders expect the special administrative region’s sales of insurance products to mainlanders to return to pre-pandemic levels next year.

Of the 1,000 mainlanders who visited Hong Kong before the border reopening, about two-thirds said they intended to buy insurance there within a year, according to UBS figures. As a result, the Swiss banking giant expects the value of insurance policies taken out by mainland residents to return next year to the peak level before 2020.

The value of insurance taken out by mainlanders in the special administrative region slumped 84 percent to HKD6.8 billion (USD866.3 million) in 2020 from 2019 and nearly 90 percent to HKD688 million (USD87.6 million) in 2021 from the year before, according to statistics from the SAR’s Insurance Authority. The average annual figure between 2016 and 2019 was HKD53.6 billion (USD6.8 billion).

Yicai Global learned from Lily, a salesperson who has been working at an established Hong Kong insurance company for eight years and manages the policies of over 300 clients, that her team was halved to 15 because of the pandemic.

The insurance market in Hong Kong began to pick up last year. New policies taken out by mainland residents tripled to HKD2.1 billion last year from 2021, IA data showed. The figure is expected to rebound this year by 15 times to HKD30 billion, returning to 60 percent of the level in 2019, according to Xiao Liqi, business manager at Midland Financial Group.

“The Hong Kong insurance market is as hot as it was in 2015 and 2016,” said Lily, who described the market in 2015 as a gold mine. Customers seek consultations throughout the day, she added. Lily received three phone calls from clients in 20 minutes when talking with Yicai Global.

Many insurers have also been launching special promotions to boost the market. AIA Group offers a special policy that offers more than a 5 percent discount to clients who pay their premiums for three years, and an over 8 percent discount for a five-year payment period. A policy offered by Manulife Financial also offers a discount of up to 20 percent to those paying three-year premiums.

Lily told Yicai Global that she has rarely seen such generous discounts in her eight-year career in the sector, but they are powerful tools to close deals fast. Her team’s sales have soared nearly 10-fold recently.

The People’s Bank of China also issued a policy in February to allow offshore financial institutions to set up life insurance, property insurance, and insurance holding companies in the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone to improve cross-border insurance and speed the zone’s transformation into a service center for the Hong Kong insurance sector in the Greater Bay Area.

The service center is expected to be built faster to better provide services to Chinese mainland residents for claims settlement and likely promote Hong Kong’s insurance sector, according to Wang Fangzhao, a non-bank chief analyst at Cinda Securities.

Editor: Futura Costaglione