Macau to Host Insurance Congress

The local insurance market is confined by the size of the city and its population, but benign competition brings a healthy industry, said Jiang Yidao, President of Macau Insurers’ Association, and Managing Director of China Taiping Insurance (Macau) Co., Ltd.
“Unlike in Mainland China and Hong Kong, where there is excessive competition that leads to losses to companies and even closures, Macau insurance companies have a good relationship with each other, which makes the market healthy and grow steadily despite the constraints of market size. You hardly hear of anyone losing money here,” said Mr. Jiang at a press conference announcing the 28th East Asian Insurance Congress. “In addition, the government’s supervision plays a positive and significant role in the wellbeing of the industry, as well as the efforts of the local companies.”
The president of the Macau Insurers’ Association said it was founded in 1987. He said that all insurer companies in town are their members, including 21 companies, with 10 conducting solely life business while the remaining 11 transact non-life insurance business.
Characteristic finance industry
The president also indicated that the local insurance industry supports the SAR Government’s initiatives to develop Macau’s finance industry with its special characteristics.
“The Macau Government should enhance its efforts to develop the finance industry. For the longt erm, it could be Macau’s way out. This initiative is in line with Macau’s goal to diversify its economy and the insurance sector fully supports it,” said Mr. Jiang. “Development of the finance industry would be a key task for Macau in the next few years and it would be complementary to many other sectors.”
Promoting Macau’s characteristic finance industry was an initiative mentioned by Secretary for Economy and Finance Lionel Leong Vai Tac in his Policy Address last year and is incorporated in Macau’s master development Five-Year Plan for 2016 to 2020. It seeks to play to Macau’s advantage of enjoying the national policy of ‘One Country, Two Systems’ and the SAR’s status as a free port to build the city into a financial services platform.
Mainland market potential
The head of the Association that represents authorised insurance companies, both life and non-life, added that Mainland China could be a possible market for local insurers to target.
“Official data from Hong Kong shows that its insurance market made more than half of the premiums from the Mainland Chinese market in 2015. We estimate the number to be lower than 10 per cent here in Macau,” said Mr. Jiang.
The latest figures from Hong Kong’s Office of the Commissioner of Insurance shows that income from Mainland Chinese accounted for nearly 37 per cent of the HK$81.5 billion (US$10.5 billion) in total new premiums brought in during the first half of 2016, a marked increase from 20.2 per cent of a year earlier. The data is not made available by the Monetary Authority of Macau (AMCM).
The reasons for the increased appetite for Hong Kong insurance products by Mainland customers are usually interpreted as moving money abroad in light of a slowdown in the Chinese economy and offsetting the further weakening of the Chinese yuan by purchasing US and Hong Kong dollar policies.