Since stepping into 2024, the Hong Kong insurance market has also seen some new changes. How will these changes affect your investment in Hong Kong insurance in the new year? Let's take a look!01

GN16 New Regulations Implemented

To further implement the principle of fairness in customer care and to assist policyholders in fully understanding the past dividend performance of insurance companies, the Hong Kong Insurance Authority (HKIA) has implemented the Guidelines for Underwriting Long-Term Insurance Business (GN16) since June 2017, which requires Hong Kong insurance companies to disclose on their official websites the realization rates of newly created participating products.

Recently, the GN16 guidelines were updated! which strengthens the disclosure requirements of the Hong Kong Insurance Authority (HKIA) on dividend realization rates.specifying that insurers must publicly disclose dividend realization rates and past payout ratios for participating policies or universal life insurance products issued after 2010 and with current in-force policies.The new rules are effective January 1, 2024

The Hong Kong Insurance Authority said:

By expanding the disclosure of "dividend realization rate" and "past dividend payout ratio" required to be disclosedProduct Range,Harmonized disclosure schedulecap (a poem)Name adoptedIn addition, potential policyholders can more efficiently utilize the relevant data to understand the historical performance of the product and provide a reference basis for making insurance decisions.

The future of Hong Kong's insurance market will showTransparency of policyholder information,Strict regulation of insurance companiesThe new normal. Before taking out an insurance policy, consumers are advised to research the past dividend performance of similar products in the market, where products with a longer life span are more valuable.02

Possible decline in guaranteed returns on prepayments

Prepayment of guaranteed returns is quite favorable for customers. Last year, the market mainstream prepayment interest rate annualized 5% + prepayment guaranteed income, in advance of the subsequent years of premiums paid in a lump sum, the subsequent years of premiums to enjoy the guaranteed income, do not need to worry about subsequent changes in interest rates, for the customer a one-two punch. Some products even offer 6%+ prepaid guaranteed return.

given thatFed rate cut expected this year, prepaid premium returns may decrease as the Federal Reserve cuts interest rates.

03

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Increased short-term cash value products

For example, FUJI has successfully launched a short-term, high present value participating insurance product, which saw significant growth in performance last year, while AUJI has upgraded Surplus Royal 3 at the start of this year, which also raises the short-term present value, i.e., it can be withdrawn after the premium is paid.

In 2024, Tomogi, Wanji, and Yonki all launched new products, predictablyMore insurers will follow suit with new products in the future.More benefits for policyholders.

04

After-sales service will be easier and better

On December 6, 2023, the Hong Kong Secretary for Financial Services and the Treasury, Mr. Rafael Hui Ching-yu, said that the preparatory work for the Hong Kong Insurance Nansha and Qianhai Mainland Service Centers, which would beProvide policy inquiry and administration, renewal and claims services to Hong Kong policyholders.

Once the service centers in Nansha and Qianhai are formally established.Hong Kong policyholders in the Mainland will have simplified procedures for handling their policiesIn addition, the efficiency of processing will be greatly enhanced and the risk of claim settlement will be greatly reduced!