Shopping in Hong Kong, what's worth buying?

Hong Kong, a bustling cosmopolitan city, attracts tourists from all over the world with its unique shopping environment, rich variety of products and excellent services.

Apart from the traditional luxury goods, electronic products and cosmetics, there is another shopping hotspot in Hong Kong that deserves the attention of mainland visitors, and that is theHong Kong insuranceThe

Since the re-commissioning of the 2023Surging number of mainland visitors taking out insurance in Hong Kong, the amount of premiums reached HK$58,971 million, a significant increase of 2,756.72%, equivalent to year-on-yearIt soared 28 times.

In this article, we will discuss the reasons why Hong Kong insurance is highly sought after by comparing Hong Kong insurance with mainland insurance.HONGKONGHong Kong Insurance vs.

Hong Kong insurance and mainland insurance are extremely different, both in terms of regulatory regime and economic structure.

In Hong Kong, currencies are freely convertible, allowing for global asset allocation; however, the Mainland imposes foreign exchange controls and there are more restrictions on investing abroad.

01

currency selection

📍 Hong Kong Insurance

Hong KongFreedom of currency exchangeAs a result, Hong Kong insurance has launched a variety of currency products.

A single policy can cover 7-9 world mainstream currencies such as RMB, USD, GBP, EUR, etc. and the policy currency can be freely converted, making it an effective way to avoid single currency risk.

📍 Mainland Insurance

Harmonization of insurance purchases in the MainlandChinese Yuan (CNY)The

02

Differences in profitability

📍 Hong Kong Insurance

In the context of globalization, Hong Kong insurance companies have received significant support for financial elements such as profits, claims funding and dividend leverage. Savings insurance in Hong Kong is mainly based on dividends.The long-term scheduled interest rate on dividends can be as high as 6-7%!

📍 Mainland Insurance

Most of the savings insurance (incremental life products) in the Mainland are fixed income.A typical fixed income savings insurance policy has a predetermined interest rate of 3%.

03

Profit sharing ratio

📍 Hong Kong Insurance

Hong Kong insuranceNo system in place to specify how dividends are to be distributedAs the Hong Kong insurance market is a free competitive market environment, each insurance company sets its own allocation ratio according to its own profitability, company development strategy and other factors.

For example, in Hong Kong savings insurance, AIA, Prudential, and AXA, promise to provide policyholders with at least"90% Distributable Profit".

📍 Mainland Insurance

In 2020, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Circular on Matters Relating to Strengthening Actuarial Supervision of Life Insurance, which clearly states that"Model Dividend Distribution Rate Uniformly 70%".In other words, for savings insurance in the Mainland, the proportion allocated to policyholders is no less than "70% of distributable surplus".

04

Types and Scope of Investments

📍 Hong Kong Insurance

There are two main types of investment for Hong Kong insurance funds:Fixed income assetsincluding treasury bonds, corporate bonds and other fixed-income assets.Equity assetsThis includes listed equities, hedge funds, mutual funds, private equity and real estate.

The investments of the HKFI are made with asset allocation as the starting point.Diversified allocation, able to diversify globally.

It takes into account both investment product categories and diversification into a wide range of areas such as equity, bonds, and alternative investments, as well as different geographies and different monetary asset classes to capture quality investment opportunities around the world across currencies and countries.

📍 Mainland Insurance

Mainland insurance companies are subject torigorous regulation, on the proportion of assets invested in stock funds, real estate, bonds, etc.There are certain limitationsThe

In summary.Hong Kong insurance has obvious advantages in terms of price, coverage, claims service, investment return and tax incentives, etc.to make it more competitive in the marketplace.

During the selection process, it is recommended to fully understand the product information, compare the strengths and weaknesses of different companies, and consult professionals to make an informed decision.Timeless Group has senior professional consultants to provide one-on-one exclusive services, welcome to contact us!