In the first half of 2022, AIA Group had a market share of 11 percent based on the value of new business in Hong Kong. Compared to the previous years, life insurance companies had difficulties generating new business. The insurance company Sun Life had the largest gap because it generated around 57 percent lower premium income.

Post-Covid Sitrep

For an industry that is notoriously averse to risk and rapid change, the past few years have been challenging for the insurance industry in Hong Kong. The COVID-19 pandemic and its effect on the region's economy significantly reduced the income of the sector. Additionally, the economic and political role of the city is evolving and forcing insurers to adapt. Given that the insurance industry generates over four percent of the local GDP, the overall health of insurers is important.

What’s next?

Like insurance companies globally, insurers in Hong Kong have to rethink old practices to embrace upcoming challenges. According to industry analysts, the main challenges include evolving customer needs, the increasing role of artificial intelligence, and climate risks. Compared to other regions, Hong Kong’s insurance providers need to embrace digitalization through Insurtech and focus on the integration of ESG into their business models to stay competitive.

In the first half of 2023, AIA Group generated 24 billion Hong Kong dollars in insurance premiums from new businesses in Hong Kong. Compared to the previous years, most life insurance companies had difficulty generating new business. A global giant As one of the world’s leading financial centers, Hong Kong has a large insurance sector. With a business volume of around 678 billion Hong Kong dollars, the insurance industry accounted for over three percent of the region’s GDP. According to official statistics, the life insurance business was more than 10 times the size of the non-life insurance business. A popular financial hub Because of Hong Kong’s unique location and status, the city was a popular location for global financial institutions, including insurance. For instance, many out of the 10 leading life insurance companies in Hong Kong were not from the region itself. Financial companies enjoy the liberal business environment and economic freedom of the city. In addition, Hong Kong serves as a connection point between the global financial system and mainland China.

In 2023, over 100,000 visitors from mainland China purchased whole life insurance in Hong Kong, representing an increase of over 4,000 percent compared to the previous year. Since the real estate market crisis began, many Chinese with investible assets look for safe alternatives, including insurance policies from Hong Kong.

GlobalData’s 'Life Insurance in Hong Kong, Key Trends and Opportunities to 2020' report provides a detailed outlook by product category for the Hong Kong life insurance segment, and a comparison of the Hong Kong insurance industry with its regional counterparts. Read More

In 2023, the number of new whole life insurance policies purchased by mainland Chinese visitors in Hong Kong increased by over 4,000 percent compared to the previous year, exceeding 100 thousand new policies in total. Since the real estate market crisis began, many Chinese with investible assets look for safe alternatives, including insurance policies from Hong Kong.

APAC Insurtech Market Report is Segmented by Insurance Line (Health, Life, and Non-Life) and Country (China, India, Japan, Hong Kong, Singapore, Indonesia, and Rest of Asia-Pacific). The Market Sizes and Forecasts are Provided in Terms of Value (USD) for all the Above Segments.

In 2023, the combined ratio of insurance companies in Hong Kong was 97.5 percent. Thereby, 63 percent of expenditure was due to losses, commission fees accounted for around 15 percent, and the management expense ratio also amounted to over 19 percent. Strong typhoons caused the bad business performance of insurers in 2017.

The Asia-Pacific neo-banking market is experiencing robust growth, driven by the increasing adoption of mobile banking, fintech innovations, and a burgeoning young population comfortable with digital financial services. The market's Compound Annual Growth Rate (CAGR) of 8.0% from 2019 to 2024 suggests a significant expansion, projected to continue through 2033. Key drivers include the region's high smartphone penetration, expanding internet access, and a preference for convenient, digitally-native financial solutions. This is particularly evident in countries like China and India, which boast massive populations and rapidly developing digital economies. The market segmentation highlights the diverse applications of neo-banking, with a strong focus on mobile banking, payments and transfers, and loans. Business and personal accounts both contribute significantly to the overall market value. While regulatory hurdles and security concerns pose some restraints, the overall market trajectory remains positive, fueled by continuous technological advancements and the increasing demand for accessible, personalized financial services. The competitive landscape is dynamic, with a mix of established players and innovative startups vying for market share. Growth will likely be concentrated in high-growth economies, with China and India expected to remain dominant players in the coming years, followed by other significant markets like Singapore, Australia, and Hong Kong. This growth is fueled by several factors including the increasing preference for personalized financial services catering to the unique needs of diverse customer segments. The integration of AI and machine learning in neo-banking platforms further enhances the customer experience, driving adoption. Moreover, strategic partnerships between neo-banks and established financial institutions are fostering innovation and expansion. This collaborative approach helps neo-banks overcome challenges like regulatory compliance and infrastructure limitations while benefiting from the established networks and customer base of traditional financial institutions. However, the market also faces challenges such as maintaining robust cybersecurity measures, addressing data privacy concerns, and navigating evolving regulatory landscapes in different countries. The continued evolution of the technological landscape and the emergence of innovative solutions such as embedded finance will significantly shape the future of the Asia-Pacific neo-banking market. This comprehensive report provides a detailed analysis of the rapidly evolving Asia-Pacific neo banking market, covering the period 2019-2033. With a base year of 2025 and an estimated year of 2025, this report offers invaluable insights into market size (in millions), growth drivers, challenges, and future trends. This study is crucial for investors, entrepreneurs, and established financial institutions seeking to understand and capitalize on opportunities within this dynamic sector. High-search-volume keywords like "Asia-Pacific neo banking market size," "digital banking Asia," "mobile banking trends," and "virtual banking growth" are integrated throughout for optimal search engine visibility. Recent developments include: In April 2022, WeLab Bank has become the first virtual bank in Hong Kong to be granted permission to provide digital wealth advising services. The Bank soft-launched its intelligent wealth solution GoWealth Digital Wealth Advisory (GoWealth) for selected customers after receiving Type 1 (Dealing in securities) and Type 4 (Advising on securities) licenses from the Hong Kong Securities and Futures Commission (HKSFC)., In December 2021, Kakao Bank announced the signing of an MOU with Kyobo Life Insurance, Kyobo Bookstore, and Kyobo Securities for data cooperation and partnerships with other financial platform firms. Financial product planning and development, as well as cooperative marketing, will arise from a business relationship with Kyobo Life Insurance and Kyobo Securities.. Notable trends are: Number of Customers for Neo Banking is Raising Significantly in the Region.

This statistic presents the value of insurance premiums written in Hong Kong in 2017 to 2019, by type. In 2019, the total value of non-life insurance premiums grew to 5.4 billion U.S. dollars in Hong Kong, whereas Life insurance premiums increased by more than five billion U.S. dollars. In 2019, Hong Kong accounted for approximately 1.15 percent of total direct premiums worldwide.

The premium income from life insurance in Macao increased from almost five billion Macau patacas in 2013 to around 34 billion Macau patacas in 2023. Macao is a special administrative region of China and part of the Hong Kong-Macao-Guangdong Bay Area as well.

In fiscal year 2018, property insurance accounted for the highest share of MSIG Holdings' gross premiums written, reaching around 32.4 percent. Compared to the previous year, the share of property insurance declined by 0.8 percent. MSIG supervises the non-life insurance business in the ASEAN, Hong Kong, and Oceania region and operates as an affiliate of MS&AD Insurance Group Holdings. MS&AD Insurance Group Holdings, Inc. is a Japanese holding company that was established as a result of the merger between several Japanese insurance companies in 2010.