The appeal of Hong Kong insurance remains robust. Provisional statistics for 2025 disclosed by the Hong Kong Insurance Authority on April 24 show the total gross premiums reached HK$8.27 trillion, a year-on-year increase of 29.7%. Within this, the total premium income for long-term in-force business amounted to HK$7.185 trillion, rising 33.7% compared to the previous year. The gross premiums for general business were HK$1.085 trillion, marking an 8% increase. As of December 31, 2025, the total assets for long-term business grew to HK$53.98 trillion, with net assets of HK$7.443 trillion. The total assets for general business increased to HK$3.379 trillion, with net assets of HK$1.365 trillion.
Market observers believe the strong performance is closely linked to business from mainland visitors. Recently, the Hong Kong Insurance Authority proposed redefining the term "mainland visitor." Under the new proposal, mainlanders arriving through talent schemes, such as the Top Talent Pass, and those permanently residing overseas may no longer be classified as mainland visitors. The previous definition reportedly led to the loss of many such high-end clients for Hong Kong.
New business premiums have reached a record high. In recent years, investment-linked policies with savings attributes, such as participating whole life insurance and savings life insurance, have constituted a significant portion of the premiums from mainland residents purchasing insurance in Hong Kong. Starting from the first quarter of 2025, the Hong Kong Insurance Authority ceased disclosing specific data on mainland policy purchases. However, growth figures for various insurance types in 2025 indicate that sectors with stronger investment features, like participating business and linked business, experienced relatively high growth rates.
Data from the Hong Kong Insurance Authority reveals that in 2025, the new business premium for long-term business (excluding retirement scheme business) was HK$3.309 trillion, a significant increase of 50.6% year-on-year, setting a new high for the past decade. This primarily consists of HK$3.121 trillion from non-linked individual business, up approximately 50% year-on-year. This can be further broken down into about HK$2.828 trillion from participating business, surging 55.1%, and HK$293 billion from other business, rising 13.7%. Additionally, linked individual business contributed HK$185 billion, up 65.4% year-on-year.
Regarding general business, following payouts and provisions reserved by insurers for the Tai Po Hung Fuk Court fire, the underwriting profit for onshore property damage business dropped sharply from HK$600 million to HK$15.8 million, a decrease of 97.2%. However, driven by onshore accident and health business turning a nearly HK$900 million underwriting profit compared to a HK$400 million loss the previous year, and onshore financial loss business (including mortgage guarantees) swinging from a HK$1.4 billion loss to a HK$500 million profit, the direct business underwriting profit for general business in 2025 recorded approximately HK$3.2 billion, a substantial increase of 174.7% year-on-year.
The performance of several Hong Kong insurers in 2025 was also notable. HSBC Insurance reported new business premiums of HK$51.4 billion, a 40% increase. Sun Life Hong Kong saw its new business Annual Premium Equivalent (APE) reach HK$11.8 billion, a significant 46% jump from 2024, hitting a record high. Bank of China (Hong Kong) Life Insurance announced that as of December 31, 2025, its new business APE was HK$25.862 billion, surging about 50% year-on-year to a company record; its market share in RMB-denominated insurance business exceeded 52%. AIA Hong Kong stated that, according to the latest provisional statistics from the Hong Kong Insurance Authority, it led the market in several key metrics for 2025, including the number of new policies and the number of in-force policies.
The attractive returns of Hong Kong insurance are a key draw. As a premier global financial center, Hong Kong boasts a vibrant insurance industry, ranking first globally in insurance penetration and second in insurance density, indicating strong competitiveness. Hong Kong is home to about 160 authorized insurers, including six ranked among the world's top ten. For mainland policyholders, the advantages and cost-effectiveness compared to domestic options are paramount.
Return on investment is a primary consideration. As long-term deposit rates in mainland China have fallen into the "1% range," the phenomenon of resident deposits "moving" has sparked discussion. In contrast, the long-term expected internal rate of return for Hong Kong's participating savings insurance is typically around 5% to 7% annualized. Historical dividend fulfillment ratios mostly fall between 85% and 105%. For example, the compound interest for long-term holdings of Hong Kong savings participating policies can potentially exceed 6%, whereas the average annualized return for mainland insurance products is about 2% to 3.5%. In July 2025, following the release of new benchmark rates, the mainland life insurance market underwent another round of adjustments to assumed interest rates. Currently, the maximum assumed interest rate for ordinary insurance products is 2.0%, for participating products it is 1.75%, and the maximum guaranteed interest rate for universal life products is 1.0%.
Around the same time, Hong Kong's insurance regulator also adjusted the maximum illustration rates for relevant life products. In late February 2025, the Hong Kong Insurance Authority issued guidance capping the illustration rate for Hong Kong dollar policies at 6% and non-Hong Kong dollar policies at 6.5%, effective July 1, 2025. Although Hong Kong's participating insurance illustration rates were lowered, they remain advantageous compared to mainland rates. Analysis from Founder Securities suggests that leading Hong Kong insurers like AIA and Prudential are expected to continue benefiting from the siphon effect and market concentration trends of Hong Kong's participating insurance.
Secondly, against a backdrop of global geopolitical tensions and economic uncertainty, Hong Kong insurance offers asset diversification, helping mainland high-net-worth individuals mitigate risks. Furthermore, due to Hong Kong's longer life expectancy and advanced medical system, insurance product pricing, particularly for life insurance, is often more competitive, with premiums for the same coverage typically lower than in mainland China.
The redefinition of "mainland visitor" is a significant development. Mainland visitors are a crucial customer base for Hong Kong's insurance industry. To prevent the occurrence of underground policies and illegal cross-border sales, since 2004, regulators have required mainland visitors to be physically present in Hong Kong to sign policies. The current definition refers to "mainland residents visiting Hong Kong with a Two-way Permit or Chinese passport." It has been observed that the Hong Kong Insurance Authority recently stated its intention to redefine this term for more precise data collection.
In March of this year, the Executive Director (Long-term Business) of the Hong Kong Insurance Authority mentioned in a media interview that a proposal is underway to redefine mainland visitors. The plan is to exclude mainlanders who come to Hong Kong through talent schemes like the Top Talent Pass, as well as those permanently residing overseas, from the "mainland visitor" classification. This would mean they would not need to fly to Hong Kong to sign policies. The Authority expects to launch a consultation in the second quarter, aiming to issue guidance on the new definition and regulatory requirements within the year.
He added that informal consultations had already been conducted. The general industry consensus is that mainlanders residing in Hong Kong through talent schemes should be classified as local clients, not mainland visitors based solely on their Chinese passport. Similarly, mainlanders permanently residing overseas with Chinese passports would also no longer be defined as mainland visitors. The Chief Executive of the Hong Kong Insurance Authority stated that under the new definition, it would facilitate policy purchases for mainlanders permanently residing overseas, such as in Canada. Under the old definition, requiring their physical presence led to the loss of many such high-end clients. This measure is expected to attract more capital inflows to Hong Kong.
It was further clarified that under the new definition, these overseas-residing mainlanders could sign policies outside Hong Kong but must prove they are not permanent residents of the mainland. The specific criteria for "permanent residence" will be part of the formal consultation. In fact, the Hong Kong Insurance Authority indicated it was reviewing the definition as early as January 2025, considering whether individuals arriving through various talent schemes should still be classified as mainland visitors.
Analysis from within the Hong Kong insurance industry suggests that redefining "mainland visitor" not only helps optimize the regulatory framework but is also a proactive response to market demands. According to 2024 provisional statistics released by the Hong Kong Insurance Authority, new business premiums from mainland visitors amounted to HK$62.8 billion, up over 6% year-on-year, accounting for approximately 29% of the total new business premiums for individual business. It is reported that the contribution from mainland visitors to new business premiums remained close to 30% in 2025.
In summary, while Hong Kong insurance holds clear advantages in terms of returns and global asset allocation, mainland residents must carefully study policy terms and mitigate associated risks when purchasing. The ultimate goal of insurance should be risk prevention and management, not merely the pursuit of high returns. Policyholders should make rational choices based on their financial situation, risk appetite, and future plans, purchasing through legal channels and avoiding herd mentality.
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