2016年CRI Mainlanders Flock to Buy HK Insurance Products（在线收听）

Hong Kong agents are banned from selling their products on the mainland, but mainland travelers can buy policies when they visit the city.

According to figures from Hong Kong's office of the Commissioner of Insurance, mainland visitors bought insurance premiums worth 2.7 billion U.S. dollars in the city in the first three quarters of last year, accounting for 22 percent of new office premiums in Hong Kong in that period.

That represents nearly a five-fold increase from 2011.

Hong Hao, from the local BOCOM International Holdings Company, believes the cheaper prices and higher returns of insurance products in Hong Kong play a key role in attracting mainland buyers.

"Insurance products sold in Hong Kong are, in general, cheaper than those sold in the mainland market. In some extreme cases, we've seen 50 percent discount between Hong Kong products and mainland products. For example, in the past 10 years, the average expected return for Hong Kong insurance products is five to nine percent. I think on the mainland it's probably less than five percent. So if you assume the currency exchange rate is stable, then the return of the Hong Kong insurance products here can be a lot more attractive."

Analysts say that insurance products provided in Hong Kong outstrip those offered on the mainland also in many other aspects, such as product innovation, scope of protection and the quality of service.

Among the attractions of local insurance policies is the wider variety of currency and investment choices as the city is able to offer products denominated in US or Hong Kong dollars, in addition to the Yuan. There is also a wide range of investment choices and terms available there.

On the mainland - insurance policies are denominated in yuan and are mainly invested in bank deposits or bonds.

However, analyst Hong Hao warns that for investors who want to hedge risks by diversifying investment tools, it is not devoid of danger, especially when it comes to currency fluctuations.

"In the past 10 years, the Hong Kong dollar has depreciated against the mainland currency by about 24 percent. So even if you get a more attractive return from the Hong Kong insurance product, you stood to lose 24 percent over the past five to 10 years. So in that way, from the investment perspective, you may not be able to get the expected yield you are getting from the Hong Kong insurance product after factoring in the currency fluctuation."

Hong Kong has seen its insurance market expanding rapidly in recent years.

With a population of around 7 million, the city has about 160 insurers, the largest number of authorized insurance companies in Asia.